Marking a big milestone in India’s decades-old dream of becoming a semiconductor nation, the Centre has approved the proposal for India’s first commercial chip fabrication plant.
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The development comes two years, two months and 14 days after the government introduced the programme for the Development of Semiconductors and Display Manufacturing Ecosystem in India with a total outlay of Rs. 76,000 crores. Industry hails the development stating this is just the beginning with many more approvals to follow.
Of the three proposals approved, the first is of Tata Electronics Private Limited, which will set up a semiconductor fab in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC) in Gujarat’s Dholera. Investment in this fab will be Rs 91,000 crore. The fabs capacity is pegged at 50,000 wafer starts per month (WSPM).
The second proposal approved is also of Tata Group but for Assembly and testing. Tata Semiconductor Assembly and Test Pvt Ltd (“TSAT”) will set up a semiconductor unit in Morigaon, Assam with an investment of Rs.27,000 crore. For this, TSAT semiconductor is developing indigenous advanced semiconductor packaging technologies including flip chip and ISIP (integrated system in package) technologies. With the capacity of testing and packaging 48 million per day, the plant will cover automotive, electric vehicles, consumer electronics, telecom, mobile phones and other segments.
The third proposal approved was CG Power’s OSAT in partnership with Renesas Electronics Corporation, Japan and Stars Microelectronics, Thailand. This plant will be setup in Sanand, Gujarat with an investment of Rs 7,600 crore. The CG power semiconductor unit will manufacture chips for consumer, industrial, automotive and power applications and will have a capacity of 15 million per day.
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Pankaj Mohindroo, Chairman of ICEA says, “The emergence of Bharat as a global semiconductor manufacturing destination no longer seems to be a distant dream. By 2027 we will have the FAB and OSAT units producing. By the end of the decade we may have more than 10 fabs and 20 OSAT units in production besides many semiconductor product design companies.”
Satya Gupta, President, VLSI Society echoes the sentiment saying “The announcement of the approval of Tata and CG Power proposals is fantastic. We are on the Fibonacci path, 1 company in 2023, 2 companies in 2024 and hopefully 3 in 2025 and 5 in 2026. Next we need compound semiconductors fabs producing GaN and SiC devices. By 2030, India will become a significant Semiconductor Product Nation.”
Approvals aside, what’s even more important is the timeline India is looking at for commencing construction. Ashwini Vaishnaw, Minister, Ministry of Electronics & IT stated that all three units will start construction within next 100 days.
“The most important thing that the world has noted as part of first-of-its-kind sweeping approval by Union Cabinet is that, the government of India has committed to get started (i.e. construction) all the Fab and OSAT projects approved within 100 days – that’s a best in class industry benchmark set by India, which was showcased last year with Micron’s approval by Cabinet and in less than 3 months starting construction for Micron’s ATMP site in Gujarat,” says Danish Faruqui, CEO, Fab Economics. “India is now committed to replicate the Micron success with Tata’s Fab, OSAT and CG Power’s OSAT within 100 days – that’s a very important message for the world and players across semiconductor value chain,” he adds.
Per Fab Economics Global Semiconductor Policy Council R&A, such speedy regulatory approval benchmark (100 days) has so far been displayed only in India and Japan in the world.
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The approval for Fabs and OSATs is a giant leap by India, which is well aligned with the geopolitics of semiconductors on which the geo-politics of the modern world is directly predicated.
