As part of its massive attempt to compete with China, Taiwan, and other nations in the chip race, India has approved investing up to $15.2 billion to build three new semiconductor plants, including its first semiconductor fab facility. On Thursday, the Indian cabinet approved the country’s first semiconductor manufacturing facility set up by the Tata Group and Taiwan’s Power Chip, which will be established in the Dholera region of Gujarat. With a monthly production capacity of 50,000 wafers, the fab facility hopes to create 3 billion chips annually for various industry categories, including telecom, power electronics, electric cars, and high-power computers.
At a press conference in New Delhi, Indian IT Minister Ashwini Vaishnaw informed reporters that the semiconductor fab’s construction would begin in a hundred days. “The construction of a semiconductor fab typically takes three to four years. The minister declared, “We will be compressing it significantly.” In addition to the semiconductor factory, the Indian government has approved a $3.2 billion investment in a semiconductor assembly, testing, marking, and packaging facility that Tata Semiconductor Assembly and Test intends to establish in the northeastern state of Assam. This will be the nation’s third semiconductor facility, with a daily production capacity of 48 million chips. The company will serve the following seven market segments: telephony, mobile phones, consumer electronics, electric vehicles, and automobiles. A “wide spectrum of companies,” including American, European, Japanese, and Indian businesses, will receive chips from the Assam facility, according to Vaishnaw.
Beyond the two sites, the government of India has authorized a $916 million investment from Renesas Electronics of Japan and Stars Microelectronics of Thailand to collaborate with Indian company CG Power on the production of customized chips in Sanand, Gujarat. It will produce chips specifically for specialized markets like high-speed rail, electric cars, space exploration, and the military. Fifteen million chips may be made per day at the specialist chip plant.
India’s attempts to expand its indigenous semiconductor industry are not the first. India has been aiming to participate more in the market for a long time, but despite its significant efforts, little attention has been drawn to it. To attract chipmakers and display manufacturers to establish local operations in the nation, the Indian government announced a $10 billion incentive program in 2021. Companies establishing domestic manufacturing projects would be eligible for incentives equal to up to 50% of their capital expenditures. That scheme had to be modified last year after poor take-up from international companies. We’d heard that the government was trying to convince TSMC — the world’s largest chipmaker — to get on board and that it’s pushing companies like Qualcomm, MediaTek, and Intel to lay out more plans for the semiconductors in the country.
