Cabinet Approves ₹1.26-Lakh Crore Investment in Three Semi-Conductor Units

Defense News ,India :-  In a significant move, the Union Cabinet has greenlit proposals for the establishment of three semiconductor units, attracting a massive investment of ₹1.26-lakh crore. Two of these cutting-edge units are slated for Gujarat, while the third will find its home in Assam. This development marks a pivotal moment for India, which is set to have four semiconductor units operational, with the first unit expected to begin supplying by the end of the year.

The Tata group is set to play a pivotal role in this semiconductor venture, with two units earmarked for Dholera (Gujarat) and Morigaon (Assam). Simultaneously, CG Power will be establishing a unit in Sanand (Gujarat). Telecom Minister Ashwini Vaishnaw, in a post-Cabinet meeting press conference, revealed that the 'Bhommi poojan' for all three plants will occur shortly, followed by construction initiation within the next 100 days. Remarkably, the timeline for these projects aims to compress the usual 3-4 year construction period, showcasing an accelerated pace.

Under the 'Development of Semiconductors and Display Manufacturing Ecosystem' program, these units will focus on producing chips for critical sectors such as defense, automobiles, and telecommunications. The government is extending substantial support, amounting to ₹76,000 crore, with ₹59,000 crore allocated specifically for these four plants.

Tata Electronics Pvt Ltd is set to establish a semiconductor fab in collaboration with Taiwan's Powerchip Semiconductor Manufacturing Corp in Dholera, Gujarat. This ambitious project, requiring an investment of ₹91,000 crore, will produce high-performance compute chips, utilizing 28 nm technology for applications ranging from electric vehicles to telecom and defense.

Meanwhile, Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) will initiate a semiconductor unit in Morigaon, Assam, with an investment of ₹27,000 crore. This facility will have a daily capacity of 48 million units, catering to automotive, electric vehicles, consumer electronics, telecom, and mobile phones.

CG Power, in collaboration with Renesas Electronics Corp and Stars Microelectronics of Thailand, is set to establish a unit in Sanand, Gujarat, with an investment of ₹7,600 crore. This semiconductor unit will focus on manufacturing 15 million chips for consumer, industrial, automotive, and power applications.

N Chandrasekaran, Chairman of Tata Sons, emphasized the critical role of semiconductors in the era of AI-led digitization. By 2030, the global semiconductor industry is anticipated to reach $1 trillion, with Indian demand crossing $110 billion. This move positions India strategically in the global semiconductor landscape, reducing dependency on countries like Taiwan.

The Cabinet's decision aligns with the Modi government's vision to position India as a key player in the semiconductor manufacturing domain. The semiconductor ecosystem in India is taking shape, bolstering the country's capabilities in chip design and fabrication. The advancements are expected to accelerate employment generation across various sectors, including downstream automotive, electronics manufacturing, telecom, and industrial sectors.

Notably, financial incentives are set to propel these projects forward, with Tata receiving ₹33,998 crore for the Dholera project, ₹10,225 crore for the Morigaon project, and CG Power securing ₹3,501 crore for the Sanand project. With a complete value chain encompassing design, fabrication, and assembly and testing, these three plants are poised to create 26,000 direct and 1 lakh indirect employment opportunities. Proposals from eight states to establish similar semiconductor plants are currently under consideration, promising a significant boost in production and a positive impact on consumer products.