India steps up chip-making ambitions, approves plants with $15 billion investment

India approved construction of three semiconductor plants with over $15 billion in investment as the country seeks to become a major chip hub.

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

India has ambitions to become a major chip hub along the lines of the US, Taiwan and South Korea and is courting foreign firms to set up operations in the country.

Tata Electronics will partner with Taiwan’s Powerchip Semiconductor Manufacturing Corp to set up one of the manufacturing plants in Dolera, Gujarat, with an investment of nearly $11 billion (Rs 91,000 crore), according to the statement.

PSMC provides chip design and manufacturing services in the logic and memory segments. There are six semiconductor foundries in Taiwan.

The factory will focus on mature 28-nanometer technology, namely in industries such as automotive, consumer electronics and defense. Mature technology refers to processes involved in the production of 28-nanometer or larger chips—typically considered legacy chips.

Tata Semiconductor Assembly and Test Pvt Ltd will set up the second plant in Morigaon, Assam, with an investment of $3.26 billion (Rs 27,000 crore) to develop “indigenous advanced semiconductor packaging technologies, including flip chip and integrated system in package technologies’ for automotive, EV and consumer electronics segments.

CG Power, in partnership with Japan’s Renesas Electronics Corporation and Thailand’s Stars Microelectronics, will set up the third factory in Sanand, Gujarat, specializing in chips for consumer, industrial, automotive and energy applications. It will see an investment of nearly $1 billion (Rs 7,600 crore).

All three factories will begin construction within the next 100 days.

In June 2023, India approved Micron to set up a semiconductor unit in Sanand, Gujarat.

“In a very short time, the India Semiconductor Mission has achieved four major successes. With these units, the semiconductor ecosystem will establish itself in India,” the government said.

These factories will directly create 20,000 advanced technology jobs and around 60,000 indirect jobs.

Global chipmakers are looking to diversify amid geopolitical uncertainty, which will benefit countries like India.

Taiwan Semiconductor Manufacturing Company, the world’s largest contract chip maker, recently opened a new plant in Japan as the country tries to boost its lagging chip manufacturing industry.