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Indian Cabinet Approves $15 Billion Semiconductor Fab Investments

Last Updated on 01st March 2024

The Indian cabinet has approved investments worth USD 15.2 billion (INR 1.26 trillion) to develop three new semiconductor fabrication plants. Ashwini Vaishnaw, the Indian Minister of Electronics and Information Technology, announced this decision.

 

Indian Cabinet Approves $15 Billion Semiconductor Fab Investments

 

The Tata Group, in partnership with Taiwan-based Powerchip (PSMC), will establish India's first semiconductor fabrication plant in Dholera, Gujarat. The estimated cost of this project is USD 10.9 billion (INR 91,000 crore). The plant is expected to produce 300 crore chips annually, catering to industries such as high-performance computing, electric vehicles, defense, and consumer electronics. The construction of this facility will commence within the next 100 days.

 

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In addition to the fabrication plant, the Tata Group will also set up a semiconductor assembly plant in Assam for USD 3.25 billion (INR 27,000 crore). This plant will primarily cater to the automobile market and will have the capacity to manufacture 48 million chips per day.

 

Renesas Electronics of Japan and Stars Microelectronics of Thailand are partners in CG Power's third proposal, which the Indian government has approved. They will set up a chip testing facility in Sanand, Gujarat, for USD 916 million (INR 7,600 crore). This facility will manufacture chips for niche sectors such as defense, space, electric vehicles, and high-speed trains.

 

Read: Samsung Semiconductors India Research Opens a New R&D Facility in Bengaluru

 

Objectives of the Investment

The investment is part of India's bid to compete with countries like China and Taiwan in the semiconductor industry. Furthermore, the plants aim to gain traction in general-purpose applications rather than focusing solely on AI chips. 

 

The move aims to reduce India's heavy dependence on imported chips, which are essential for various sectors such as defense, automobiles, and telecommunications. The plants will have the capacity to produce billions of chips annually for a variety of market segments, including high-power computers, electric vehicles, telecom, and power electronics.  

 

The chips produced will cater to a wide spectrum of companies, including Indian, American, European, and some Japanese companies. It will be a significant export as well as for domestic use.

 

Read: APACT and ASIP Joint Venture to Develop $120 Million Semiconductor Fabrication Plant in Telangana

 

Details About Tata Group Investment 

 

Indian Cabinet Approves $15 Billion Semiconductor Fab Investments

 

Tata Electronics, a wholly-owned subsidiary of Tata Sons Pvt. Ltd., will partner with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) to build India’s first AI-enabled state-of-the-art fab. The total investment for this project is up to approximately USD 11 billion (INR 91,000 crores), and it is expected to generate over 20,000 direct and indirect skilled jobs in the region.

 

The new Fab will have a manufacturing capacity of up to 50,000 wafers per month. Each wafer can constitute up to 5,000 chips, leading to an estimated annual production of 300 crore chips. These chips will cater to a wide range of sectors, including high-power computing, electric vehicles, telecom, defense, consumer electronics, automobiles, and power electronics.

 

The Fab will include next-generation factory automation capabilities, deploying data analytics and machine learning to achieve industry-best factory efficiency. The chips produced will address the growing demand in markets such as automotive, computing and data storage, wireless communication, and artificial intelligence.

 

Alongside its chip manufacturing unit, the Tata Group is establishing another facility in Assam specifically for assembling and testing semiconductor chips. This new plant, valued at USD 3.25 billion, will focus on serving the automobile industry and is expected to produce 48 million chips daily.

 

For further details about the two projects, explore our Indian semiconductor database
 

Powerchip Semiconductor Manufacturing Corporation 

Powerchip Semiconductor Manufacturing Corporation (PSMC), founded in 1994 and headquartered in Hsinchu, Taiwan, is a major player in the global semiconductor industry. As of 2020, it ranked as the 7th largest foundry in the world, specializing in the production of memory chips and other integrated circuits. The company operates three 12-inch and two 8-inch wafer fabrication facilities, offering foundry services, as well as design, manufacturing, and testing capabilities.

 

Read:  Tower Semiconductor Plans to Develop $8 Billion Semiconductor Fabrication Plant in India

 

Details About CG Power and Renesas Joint Venture

CG Power and Industrial Solutions Limited, a part of Tube Investments of India Limited and the Murugappa Group, has recently signed a Joint Venture Agreement (JVA) with Renesas Electronics Corporation, a premier supplier of advanced semiconductor solutions, and Stars Microelectronics, a Thailand-based Outsourced Semiconductor Assembly and Test (OSAT) provider. This joint venture aims to establish an OSAT facility in India.

 

 The joint venture plans to invest USD 917 million (INR 7,600 crore) over a five-year period, which will be financed through a mix of subsidies, equity, and potential bank borrowings as required.

 

The joint venture will set up a state-of-the-art manufacturing facility in Sanand, Gujarat, with a capacity that will ramp up to 15 million units per day. The joint venture will manufacture a wide range of products, ranging from legacy packages such as QFN and QFP to advanced packages such as FC BGA, and FC CSP. The joint venture will cater to industries such as automotive, consumer, industrial, and 5G, to name a few.

 

Read: : Assam Will Get $3 Billion Semiconductor Packaging Unit: Rajeev Chandrasekhar

 

Find Upcoming and Ongoing Semiconductor Fabrication Plant Projects Around India with Ease.

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The database is a vital resource for a wide range of entities, including semiconductor manufacturers, EPC Companies, silicon material suppliers, data analytics and software providers, consulting and advisory firms, investors, multilateral banks and financial institutions, and law firms.

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