Cabinet Okays India’s First Semiconductor Fab By Tata Group, Taiwan’s PSMC

The Union Cabinet on Thursday (February 29) approved the country’s first semiconductor fab to be set up by the Tata Group in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC). 

Tata Electronics Pvt Ltd’s (TEPL’s) semiconductor fabrication plant will come up in Gujarat’s Dholera with a capacity of 50,000 wafers per month, said IT Minister Ashwini Vaishnaw.

A net investment of INR 91,000 Cr will go into the fab.

“TEPL will be producing 50,000 wafers per 2.5 Lakh chips per month. These chips will cater to 8 sectors including high power compute, EV, telecomm, defence, consumer electronics, automobile, power electronics,” Vaishnaw said.

Besides, the Cabinet okayed two other semiconductor proposals. Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) will set up a chip assembly and testing unit in Assam at an investment of INR 27,000 Cr, Vaishnaw said.

Meanwhile, CG Power and Japan’s Renesas will set up a semiconductor plant in Gujarat’s Sanand at an estimated cost of INR 7,600 Cr, producing 15 Mn chips per day.

Together, the three projects will attract an investment of INR 1.26 Lakh Cr. Construction at the three plants will commence within the next 100 days. 

It is pertinent to note that the Indian government has taken a number of steps to develop the semiconductor ecosystem to make the country self-reliant. As part of this, it approved the Semicon India programme with an outlay of INR 76,000 Cr to develop the semiconductor and display manufacturing ecosystem. 

While Tata is currently at the forefront of semiconductor manufacturing in India, oil-to-telecom conglomerate Reliance Industries Ltd (RIL) has also reportedly been exploring plans to venture into semiconductor manufacturing. 

Speaking at an event earlier this week, union minister of state for electronics and IT Rajeev Chandrasekhar said that India has received more than INR 2.50 Lakh Cr investment proposals from global chip makers.

“For decades, India’s semiconductor ecosystem was absent, and now we are becoming a destination that is receiving investments from global majors while building significant capacities and capabilities from manufacturing to design to systems,” Chandrasekhar posted on X. 

It is pertinent to note that Chandrasekhar also informed the Parliament earlier this month that the government had received  four proposals for building semiconductor manufacturing plants and 13 for chip assembly units.

These proposals are in addition to the INR 22,516 Cr chip assembly plant set up by US-based memory chip maker Micron in Gujarat. 

The government’s push has also resulted in a rise in the number of semiconductor startups in the country. While the number of such startups stood at 21 at the beginning of 2023, Chandrasekhar said this number was expected to go up to 50 by the end of the year. 

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