India Approves Three Chip Plants with $15 Billion Investment to Boost Semiconductor Goals

India aims to become a major chip hub and has approved construction of three semiconductor factories with an investment of more than $15 billion.

“India already has deep capabilities in chip design. With these units, our country will develop capabilities in chip fabrication. Advanced packaging technologies will be indigenously developed in India,” a government statement on Thursday said.

India has ambitions to become a major chip hub alongside the US, Taiwan and South Korea and is courting foreign companies to set up shop in India.

According to the release, Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corp. will work together to establish one of the fabrication factories in Dholera, Gujarat, with an approximately $11 billion (Rs. 91,000 crore) investment.

In the logic and memory sectors, PSMC offers services for chip design and manufacture. Taiwan is host to six of its semiconductor foundries.

The factory is going to focus on the more developed 28-nanometer technology, specifically in the automobiles consumer electronics, and defense industries. The processes used to create chips that are 28 nanometers or larger—generally considered to as legacy chips—are considered to as mature technology.

With a $3.26 billion (Rs. 27,000 crore) investment, Tata Semiconductor Assembly and Test Pvt Ltd plans to build a second plant in Morigaon, Assam, to develop “indigenous advanced semiconductor packaging technologies including flip chip and integrated system in package technologies” for the automotive, electric vehicle, and consumer electronics segments.

The third facility of CG Power, which specialises in chips for consumer, industrial, automotive, and power applications, will be located in Sanand, Gujarat. The company is partnering with Renesas Electronics Corporation of Japan and Stars Microelectronics of Thailand. The estimated investment is close to $1 billion (about Rs 7,600 crore).

Within the next 100 days, the building of all three factories will begin.

India gave Micron permission to set up a semiconductor plant in Sanand, Gujarat, in June 2023.

“Within a very short time, India Semiconductor Mission has achieved four big successes. With these units, the semiconductor ecosystem will get established in India,” the government said.

About 60,000 indirect jobs and 20,000 direct jobs in high technology will be generated by these factories.

In the face of geopolitical volatility, global chip manufacturers have been seeking to diversify their business, which might help countries like India.

The largest contract chip manufacturer in the world, Taiwan Semiconductor Manufacturing Company, has just established a new facility in Japan in an effort to strengthen the nation’s flagging chip manufacturing industry.