India Reviews $21 Bn Proposals To Fast Track Chip Manufacturing Market

The Indian government is evaluating proposals totalling $21 Bn in investments as part of its effort to boost chip manufacturing within the country.

According to a Bloomberg report, the proposals encompass diverse ventures from both domestic conglomerates and international players.

Tower Semiconductor Ltd. from Israel has proposed a $9 Bn plant, and Tata Group from India has offered an $8 Bn chip fabrication unit.

Both proposals, with a combined investment of $17 Bn, are slated to be located in Gujarat, the report added.

Tower Semiconductor’s plan involves scaling up a plant over a decade to eventually produce 80,000 silicon wafers per month, according to a source. If approved, this would mark the first fabrication unit in India operated by a major semiconductor company.

The Tata conglomerate is anticipated to collaborate with Taiwan’s Powerchip Semiconductor Manufacturing Corp. for its project, although discussions have also been held with United Microelectronics Corporation.

The Tata group has previously announced its plan to start construction of a chip fabrication plant in Dholera this year. Both Tower and Tata’s facilities would focus on producing so-called mature chips, utilizing 40-nanometer or older technology, which are extensively utilised in consumer electronics, automobiles, defence systems, and aircraft.

The Tata Group additionally intends to construct a $3 Bn chip-packaging plant in eastern India. This facility will assemble and export chips, including those for automakers like Tata Motors Ltd., which is controlled by the group. Government approval is also needed for this project to move forward.

The government has given approval to the Semicon India programme, allocating a total budget of INR 76,000 Cr for the development of the semiconductor and display manufacturing ecosystem within the country.

Earlier, Rajeev Chandrasekhar, Minister of State for Electronics and IT, said 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.

India’s semiconductor industry is forecasted to reach a market value of $55 Bn by 2026. This growth is propelled by the increasing demand for smartphones, automobiles, and data storage. Semiconductor chips are expected to further integrate into various sectors of India’s economy, including aerospace, automobile, communication, IT, clean energy, defence, and others.