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Three plants shipping, nine more on the way: Unpacking PM Modi's chips-&-minerals pledge in Independence Day speech
Micron, Kaynes and CG Power are shipping chips from Sanand, Gujarat. The Semicon 2.0 leap, involving fabrication and advanced chips, is still ahead.
From the ramparts of the Red Fort, Prime Minister Narendra Modi on Saturday dedicated several minutes on a subject that would have been unthinkable in an Independence Day speech a decade ago – semiconductor chips.
PM Modi told the country that three semiconductor plants had already started operations, with their output headed for export, and that "another five to eight semiconductor plants are likely to become operational" in the years ahead.
He then turned to critical minerals, noting that India had launched the National Critical Minerals Mission and announced the Critical Mineral Corridor, and that "nations around the world are increasingly placing their trust in India" on the subject.
A look at the progress made by India and how far along these facilities are.
What's operational?
The three plants PM Modi was referring to are located in an industrial cluster in Sanand, Gujarat. They don't make the chips from scratch, they finish them.
Micron Technology's $2.75 billion facility, inaugurated in February, packages and tests the DRAM and NAND memory chips that go into everything from phones to data centres, and has been shipping since earlier this year. Kaynes Semicon's plant went commercial on March 31, just fourteen months after breaking ground, and is scaling toward 6.3 million chips a day. CG Power's joint venture with Japan's Renesas and Thailand's Stars Microelectronics — the newest of the three — started commercial production on July 4.
In industry parlance, this stage of the business is called OSAT, for outsourced semiconductor assembly and test, or ATMP in the language India's own scheme documents tend to prefer — assembly, testing, marking and packaging.
The terms describe the same job: taking a finished silicon wafer, etched somewhere else, and cutting it, wiring it and boxing it into a chip that can actually be sold. It's manufacturing that is genuinely hard to execute at the pace Kaynes managed — fourteen months from groundbreaking to commercial shipment. But it stops short of chip fabrication. That process is harder and more capital-intensive as it involves building the transistors themselves onto raw silicon.
Also read: PM Modi delivers shortest Independence Day speech in 4 years. His longest address was this
In the pipeline
Days before the Independence Day speech, the India Semiconductor Mission's account put the tally of projects at twelve under its first phase. Of this, three have reached commercial production.
That leaves nine still working towards it, including Tata Electronics' wafer fabrication plant in Gujarat's Dholera, India's first genuine fab, where – according to Union IT minister Ashwini Vaishnaw's statement – the first chip should roll out by December.
Tata's separate assembly and test facility in Jagiroad, Assam, has not yet been commissioned yet.
An HCL-Foxconn packaging unit at Jewar, near NCR's new airport in Gautam Budh Nagar, a silicon-carbide plant in Odisha, two more packaging facilities in Gujarat approved this May, and a newly cleared, not-yet-detailed project in Rajasthan – are in the works.
So, five to eight of those nine projects becoming operational within seven or eight years would line up according to the Prime Minister's statement.
Why the second phase matters
The India Semiconductor Mission's newly approved second phase, Semicon 2.0, is a different story.
Everything running or under construction under the first India Semiconductor Mission — the ₹76,000 crore programme launched in 2021 — is at the less demanding end of the industry: packaging, testing, and one fabrication plant built on mature manufacturing nodes rather than the cutting edge.
Semicon 2.0, cleared by the Cabinet in July with an outlay of ₹1,27,500 crore, targets what the first phase left out. That means the equipment and specialty materials that fabs need — over 90% of which India still imports — the ability to design India's own chip technology rather than relying on foreign designs, and a roadmap towards advanced 2-nanometre and 3-nanometre chips.
The scheme also aims to grow at least fifty “fabless" chip-design companies, firms that design chips but don't own a factory, outsourcing the actual manufacturing instead, the way global players like AMD and Qualcomm do.
At the moment, though, India consumes close to $50 billion worth of chips a year, and domestic manufacturing supplies less than $3 billion of that. Consumption is projected to cross $100 billion by 2030, according to estimates from the India Electronics and Semiconductor Association and Counterpoint Research.
The minerals underneath it all
Semiconductors were the headline. Critical minerals are the raw material, quite literally, that chips, batteries, magnets and clean-energy hardware are made from.
India's National Critical Mineral Mission, launched in January last year with an outlay of ₹34,300 crore, covers twenty-four minerals, including lithium, cobalt, nickel, graphite and rare earths. It targets several fronts at once — mining more at home, acquiring mineral assets abroad, recycling what's already in use and building trade partnerships.
The government-owned Khanij Bidesh India has secured lithium exploration rights over roughly 15,700 hectares in Argentina. India has separately signed minerals cooperation agreements with Australia, Chile and, as recently as February, Brazil — a deal that PM Modi had called a step toward more resilient supply chains.
The Critical Mineral Corridor PM Modi mentioned in his speech on Saturday was announced in this year's Union Budget and earmarks four mineral-rich, coastal states — Odisha, Kerala, Andhra Pradesh and Tamil Nadu — to anchor processing and manufacturing besides mining.
It builds on a scheme cleared last November to fund domestic production of sintered rare-earth magnets — made by compacting mineral powder and heat-fusing it into a solid block — targeting six thousand tonnes a year of capacity. Analysts who track the sector make much the same point about minerals as applies to chips: mining is the comparatively easy part. Processing — turning ore into usable material — is where India, and most of the world outside China, remain behind.
How quickly this gap is closed isn't known–as yet.
