On 18th February (Sunday), Minister of Electronics and IT Rajeev Chandrasekhar stated that two full-fledged semiconductor fabrication plants with multi-billion dollar investments are soon coming up in India. These semiconductor plants will be beside the several chip assembly and packaging units already launched and announced.
In an interview with PTI, Minister Chandrashekhar confirmed that the two projects include the USD 8 billion proposal submitted by Israel-based Tower Semiconductors and the other project by Tata Group.
He said, “I am happy to share this with you (PTI) and you are probably the first one I’m sharing this with. In the near term, two full-blown fabs are going to come up in India. These are going to be multi-billion-dollar fabs in the 65, 40, and 28-nanometer technology and there are going to be a host of other packaging proposals that we are evaluating.”
He made this announcement while responding to a question on the USD 8 billion investment proposal submitted by Tower Semiconductors as well as the status of the semiconductor roadmap in India.
He emphasised that the projects would be approved in the third term of Prime Minister Narendra Modi if they cannot be cleared before the Lok Sabha elections.
Minister Chandrasekhar said, “I can safely tell you that the names that you mentioned have submitted these big, very credible, very significant investment proposals. There are other announced proposals by Tata as well in the fab. We see this happening in a very, very quick short term.”
Last week it was reported by the Indian Express that Israel-based chip manufacturing company Tower Semiconductor has submitted its proposal to set up a chip fabrication plant in India worth around $8 billion. The company will reportedly manufacture 65 nanometre and 40 nanometre chips in India. These chips are used in several sectors, including automotive and wearable electronics. Tower has not finalised the location of the project. Reportedly the company has chosen BC Jindal group as its partner for the project.
The company had earlier announced a $3 billion plant in Karnataka in partnership with international consortium ISMC. However, the project didn’t go ahead due to a proposal to merge the company with Intel. In August 2023, the Intel-Tower merger was called off due to regulatory issues in some countries.
Notably, at the Vibrant Gujarat Summit held in Gift City in January, Tata Sons Chairman N. Chandrasekaran announced that the company will set up a semiconductor fabrication plant in the country, apart from the testing and packaging facility in Assam which was earlier announced. He said that the company has identified Dholera in Gujarat as the location for its semiconductor fabrication unit, and negotiations will be finalised soon. “We are about to complete negotiations and start work in 2024,” Chandrasekaran said during the summit.
On Thursday (15th February), Minister Chandrasekhar announced that the plant in Assam will be finalised soon, and the state will soon have its first-ever semiconductor packaging plant worth nearly Rs 25,000 crore. The semiconductor packaging plant will be established in partnership with the Assam Government and TATA Group. The project was announced in December 2023, and the plant will come up in Jagiroad near Guwahati. However, at that time the investment for the project was reported to be Rs 40,000 crore.
As per reports, the Union government has so far received four proposals to set up semiconductor manufacturing plants as well as 13 proposals for chip Assembly, Testing, Monitoring, and Packaging (ATMP) units.
Another semiconductor assembly and testing facility was announced last week by Murugappa Group’s CG Power and Industrial Solutions, Renesas Electronics America Inc and Thailand-based Stars Microelectronics. Foxconn has set up a joint venture with Indian IT giant HCL Group to set up a semiconductor Outsourced Assembly and Testing (OSAT) unit in India. Foxconn has also filed a fresh application for setting up a semiconductor fab in the country after the proposed venture with Vedanta was called off. Reportedly, the Taiwanese company has tied up with STMicroelectronics NV for the manufacturing plant.
These proposals are in addition to a Rs 22,516-crore chip assembly plant in Gujarat which is being set up by US-based memory chip maker Micron. Phase 1 of the plant will be operational by early 2025.
The Minister slammed the UPA government stressing that India’s semiconductor story is very akin to that of electronics in the country. He stated that the government before 2014, the UPA government, ignored electronics and for 75 years, India was a “classic case of missed opportunity” in semiconductors.
Contrasting the work of UPA and PM Modi-led government, Minister Chandrashekhar said, “In 2012 Intel wanted to set up a plant here, and they found no support and they walked away. When the prime minister launched this (semiconductor) program in 2020 January, we knew we had to work very fast, and smartly and we had to in essence play catch up for the last 75 years of lost opportunity. We have made significant progress in a broad spectrum of areas: semiconductor design, startups, research, talent, packaging, and fabrication.”
It is pertinent to note that domestic electronics manufacturing has increased by over four-fold in the last ten years from Rs 1,80,454 crore (USD 29.8 billion) electronics manufacturing in FY 2013-14 to Rs 8,22,350 crore (USD 102 billion) in FY 2022-23, as per government data. This is further expected to grow up to Rs 23,95,195 crore (USD 300 billion) by 2026.
The Minister further added, “India has played a big role in that shift in the last five years. India will play a big role in the coming five years to a decade. In electronics manufacturing, we were almost absent. To put it in the words of Tim Cook (Apple CEO). Three years ago there were no Apple phones being manufactured in India. We were importing 100 percent of all mobile phones. Today we are exporting USD 10-12 billion of Apple and Samsung mobile phones.”
He stated that the government wants to do USD 300 billion of electronics manufacturing by the year 2026-27.
As per official data, India has now reached a stage where 99.2 percent of mobile handsets being used in the country are manufactured domestically. From being an importer in the segment, India has now become an exporter.
