India to spend $15bn creating a domestic chip industry

Oracle’s Bangalore headquarters. India’s IT industry has built up a good reputation, but it has no presence in the chip fabrication market (Ajith Kumar/CC BY 2.0)
India’s cabinet has given the green light for three semiconductor plants together worth $15.2bn.

Prime Minister Narendra Modi approved the projects yesterday and ordered construction to start within 100 days.

India has no domestic chip fabricating industry yet, although US company Micron is building a semiconductor “fab” in Sanand, Gujarat.

The government wants a share of the global semiconductor market, expected to be worth $63bn by 2026.

A government statement gave details of the three new plants.

One will be built by Tata Electronics and Powerchip Semiconductor Manufacturing Corp of Taiwan in the town of Dholera, Gujarat, and will cost  $11bn.

The government said Powerchip had six foundries in Taiwan and was “renowned for its expertise in logic and memory foundry segments”. The factory will have 50,000 wafer starts per month.

The chips will be 28nm and will be used in high-current applications such as EVs, telecoms, and consumer electronics.

The second plant will be built in Morigaon, Assam, by Tata Semiconductor Assembly and Test. This $3.3bn facility will develop Indian-designed semiconductor packaging technologies for similar markets.

The third plant will be built by CG Power in partnership with Renesas Electronics Corporation of Japan, and Stars Microelectronics of Thailand.

This plant will cost $914m and will be sited in Sanand, Gujarat.

Renesas makes specialised chips for microcontrollers, analogue, power, and “system on chip” products.

The government hopes these will establish a semiconductor ecosystem.

It adds that the plants will generate 20,000 tech jobs and about 60,000 more downstream.

The plants will also create an Indian supply chain for automotive, electronics manufacturing, telecom manufacturing, industrial manufacturing, and other semiconductor consuming industries.

Indian Electronics Minister Ashwini Vaishnaw said the initiative marked “a big decision for the country and a key accomplishment towards making India a self-dependent country”.

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