Cabinet nod to 3 semiconductor plants, Tata Group to set up two
Cabinet approves setting up semiconductor units by Tata and Murugappa Groups in Gujarat and Assam.
The Cabinet approved three proposals to set up semiconductor units in India on Thursday, including two plants by the Tata Group in Gujarat and Assam, and one by the Murugappa Group-owned CG Power in Gujarat. All three units will begin construction within 100 days, IT minister Ashwini Vaishnaw said.
A total of ₹1,26,000 crore will be invested in these three units, bringing the total investment to ₹1,49,000 crore across four semiconductor units that are slated to come up in the country. “This [the three units] will lead to direct employment of 26,000 people and indirect employment of one lakh [100,000] people,” Vaishnaw said.
In June, 2023, the government cleared a proposal by American company Micron to set up a plant in Gujarat.
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The new plants include a Tata Electronics Private Limited (TEPL) plant that will be set up in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC). It is the first semiconductor fab unit in India and will be set up in Dholera, Gujarat.
“This is a decisive moment for the country and a big achievement on India’s path to self-reliance,” Vaishnaw said.
The unit will involve an investment of ₹91,000 crore and produce 50,000 wafers per month --- a wafer is a silicon base on which microchips are designed. The output will create high performance compute chips to be used in electric vehicles, high power compute, telecom, defence, automobiles, consumer electronics, power electronics and display.
The other two plants --- Tata Semiconductor Assembly and Test Private Limited (TSAT) in Morigaon (Assam) and CG Power’s in Sanand, Gujarat --- are ATMP (assembly, testing, marking, and packaging) ones.
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“India has developed ATMP technology indigenously for the first time [in the TSAT plant],” Vaishnaw said. It has been developed by TSAT and the intellectual property is also Tata’s.
The minister said an estimated ₹59,000 crore will be spent by the government as fiscal support for all four plants --- the three approved on Thursday and Micron’s cleared last year.
The TSAT plant will be set up in Assam in partnership with “two large, reputed American conglomerates” which Vaishnaw refused to name citing a confidentiality request from these two companies. This unit will be set up with an investment of ₹27,000 crore, and will have an output of 48 million chips per day.
CG Power, in partnership with Japan’s Renesas Electronics Corporation and Thailand’s Stars Microelectronics, will set up an ATMP unit for specialised chips in Sanand, Gujarat with an investment of ₹7,600 crore, and an output of 15 million chips per day. These specialised chips can be used for defence, “by DRDO”, for space, etc., Vaishnaw said.
“Majority [of the wafers produced will be] for domestic market in the fab [TEPL in Gujarat] and significant part will be exported also. In the Assam plant [TSAT], majority will be exported a significant part will be consumed in India as well,” Vaishnaw said.
With this approval, three of the four semiconductor units in the country will be housed in Gujarat --- Micron and CG Power’s in Sanand, and TEPL’s in Dholera.
“It is up to the manufacturer to decide which state they want to set up their plant in,” Vaishnaw said. He said that eight states had expressed an interest in setting up semiconductor manufacturing units but declined to name them.
India launched a PLI (production-linked incentive) scheme to catalyse a semiconductor and display manufacturing ecosystems in December 2021. It was launched with an outlay of ₹76,000 crore under which the government will give fiscal support of 50% of the project cost for setting up semiconductor fab units, and fiscal support of 50% for ATMP units and others.
Micron’s ATMP facility was approved in June 2023 ; Micron invested $2.75 billion into its plant in Gujarat whose construction began in September 2023. “The first chip from the Micron plant will be rolled out in December 2024,” Vaishnaw said.
Vaishnaw said it usually takes semiconductor units four years to start rolling out products from the date of approval “but we will compress it significantly because the one year usually taken to get permits will be decreased to 100 days”.
The ministry of electronics and IT will also modernize the semiconductor laboratory (SCL) in Mohali at a cost of ₹10,000 crore but the proposal has not yet been taken to the cabinet, Vaishnaw said. “We are developing the proposal. That will take about three months,” he said.
Anku Jain, managing director of MediaTek — a Taiwanese company that designs semiconductor chips— said the announcement was a crucial step in the growth of the Indian semiconductor ecosystem.
“It’s a proud moment for us to see India’s vision turning into reality and history being created as we move towards a bright future. As this fulfils another important step in the semiconductor ecosystem value chain, MediaTek is very excited to see this happen. In the future we could source the chips from within India as and when it aligns with our requirements,” Jain, who is also a member of the executive council of India Electronics and Semiconductors Association (IESA), said.
Pankaj Mohindroo, the chairperson of the India Cellular and Electronics Association (ICEA), said: “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.”
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