Cabinet Approves HCL-Foxconn’s INR 3,700 Semiconductor Plant In UP

The Union cabinet has given its approval to a joint venture (JV) between HCL and Foxconn to set up a semiconductor unit under the India Semiconductor Mission. The unit, which will see the two entities cumulatively invest INR 3,700 Cr, will come up near Jewar Airport in Uttar Pradesh’s Noida. 

In a statement, the government said that the unit will manufacture display driver chips for mobile phones, laptops, automobiles, among other devices. The plant is set to have a design output capacity of 36 Mn units per month, designing 20,000 wafers per month. 

“With the demand for semiconductor increasing with the rapid growth of laptop, mobile phone, server, medical device, power electronics, defence equipment, and consumer electronics manufacturing in Bharat, this new unit will further add to Prime Minister Narendra Modi’s vision of Atmanirbhar Bharat,” the statement added. 

The two companies signed the JV agreement in January 2024 to establish an OSAT (Outsourced Semiconductor Assembly and Test) in India. The Taiwanese tech company, which is a key manufacturer of US tech giant Apple, invested $37.3 Mn in the JV to control 40% stake in it.  

While the contours of the OSAT plants have not been disclosed yet, it was reported earlier that the unit would be spread across 300 acres near the Jewar airport. Further, Foxconn had also shared plans to invest INR 424 Cr in the JV with the HCL Group.

India’s Growing Semiconductor Ecosystem

The Foxconn-HCL semiconductor plant is the sixth such unit to receive the government’s nod. Here are the other five units that have received the approval under the India Semiconductor Mission: 

Micron Technology: It received approval to set up a semiconductor unit in Sanand, Gujarat in June 2023. The plant is expected to roll out its first semiconductor chip in the first half of 2025.

Kaynes Semicon: The Cabinet approved Kaynes’s OSAT facility in Sanand, Gujarat in September 2024. The proposed unit will be set up with an investment of INR 3,300 Cr.   

Tata Electronics: The government approved the company’s proposal to set up semiconductor manufacturing facilities, including a semiconductor fab in Dholera, Gujarat, and an assembly and test facility in Jagiroad, Assam, in February 2024. It has committed an investment of $10.5 Bn for this plant. 

CG Power: The company got approval to set up a semiconductor ATMP unit in Sanand, Gujarat, in partnership with Renesas Electronics and Stars Microelectronics in February 2024. The facility is expected to have a production capacity of 15 Mn units per day and will cater to automotive, consumer, industrial, and 5G industries.

In the statement, the government added that the US-based semiconductor equipment makers Applied Materials and Lam Research are also strengthening their presence in India. 

It is pertinent to mention that Applied Materials signed a MoU with the Tamil Nadu government to establish an advanced AI-enabled technology development Centre of Excellence focused on semiconductor and equipment manufacturing in Chennai earlier last year.

Meanwhile, Lam Research, earlier this year, committed INR 10,000 Cr in Karnataka to strengthen the state’s semiconductor ecosystem and position it as a key player in the industry.

Besides, other global companies like Merck, Linde, Air Liquide, Inox, and many other gas and chemical suppliers are gearing up for growth in the Indian semiconductor industry. 

Following the disruptions in the semiconductor supply chain during Covid-19 and the China+1 policy adopted by firms, India has heightened its focus on semiconductor manufacturing.

In September last year, while inaugurating the Semicon India event, PM Narendra Modi said that the Centre has set up a special reserve fund with an outlay of INR 1 Lakh Cr to drive innovation in the semiconductor and science & technology sectors.

“Our dream is to have India-made chip in every device in the world,” he said during that event. 

As of now, the government has made a commitment of INR 76,000 Cr under the first phase of the Semicon India programme to incentivise silicon semiconductor fabs, display fabs, compound semiconductors, and more. 

Of this, the government has committed more than INR 60,000 Cr to five major units, as mentioned above, of the INR 65,000 Cr which earmarked for chip manufacturing and packaging units. 

The Centre is currently evaluating plans to launch the second phase of the programme.