PM Modi Inaugurates Three Semiconductor Plants in India; Starting with 28nm Chips

PM Modi announcing three chip manufacturing facilities in india
Image Courtesy: Narendra Modi/YouTube
In Short
  • India is investing over Rs. 1.25 lakh crore to set up three chip manufacturing units in India.
  • Tata's TEPL has partnered with Taiwan's PSMC to set up a fabrication facility in Gujarat. It plans to start manufacturing 28nm chips by the end of 2026.
  • One more chip facility is being set up in Gujarat and another plant is being set up in Assam.

At the “India’s Techade: Chips for Viksit Bharat” event, Prime Minister Narendra Modi laid the foundation stones of three semiconductor facilities. The plan to manufacture chips in India is a highly ambitious project and the government is significantly subsidizing (about 70%) the cost to make India a hub for silicon fabrication. The Indian government is investing over Rs. 1.25 lakh crore into three semiconductor plants in India.

The first commercial semiconductor fab is being set up in Dholera, Gujarat by Tata Electronics Private Limited (TEPL). Tata has partnered with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) to set up the fabrication facility.

PSMC will help with the technology transfer to India and TEPL plans to roll out 28nm chips by the end of 2026, according to a report by The Economic Times. In the coming years, the plant can churn out 22nm chips. PSMC is ranked as the 7th largest semiconductor foundry globally.

Initially, it would start manufacturing chips for microcontrollers, power management ICs, wireless devices, automotive chips, and more. Tata has set out an ambitious plan and has already hired the ex-president of Intel Foundry Services, Randhir Thakur as TEPL’s CEO.

The company has also roped in Srinivas Satya, the Country President of Applied Materials India as TEPL’s chief supply chain officer. The government is investing about Rs. 91,000 crore into this facility.

Apart from that, another semiconductor plan will be established in Morigaon, Assam by TEPL. It has received an investment of close to Rs. 27,000 crore.

Finally, the third semiconductor fab will be set up in Sanand, Gujarat by CG Power and Industrial Solutions, attracting an investment of Rs. 7,500 crore from the government. Both these facilities will be used for semiconductor assembly, testing, marking, and packaging (also called ATMP).

While India is at a nascent stage in semiconductor manufacturing, it can accelerate growth with global investments, industry-academic collaboration, and government support. According to a BBC report, India has top global talent in chip design, close to 20%. Many companies like Intel, AMD, and Qualcomm have R&D facilities in India that take advantage of local engineering talent.

Now, with a homegrown semiconductor foundry, India stands a chance to become a key player like South Korea, Taiwan, Japan, and China. We should also note that India slashed import duty on smartphones recently and the country is slowly becoming one of the largest exporters of electronics in the world.

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