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Union cabinet approves three more semiconductor plants in India, two in Gujarat and one in Assam

Two of the units are being built by Tata group, while the third one is by Murugappa Group’s CG Power. One plant by Tata Electronics will be a full-fledged semiconductor fabrication unit, while the other two are Assembly, Testing, Marking, And Packaging (ATMP) units.

In a major initiative in fulfilling the Narendra Modi government’s ambition to turn India into a semiconductor manufacturing hub, the Central government on Thursday (29th February), approved the proposal for setting up three semiconductor plants in India. Two of these plants will be established in Gujarat while one in Assam. The construction of these plants will commence in the next hundred days. The decision was taken by the Union cabinet chaired by Prime Minister Narendra Modi.

Two of the units are being built by Tata group, while the third one is by Murugappa Group’s CG Power. One plant by Tata Electronics will be a full-fledged semiconductor fabrication unit, while the other two are Assembly, Testing, Marking, And Packaging (ATMP) units.

Tata Electronics Private will establish a semiconductor fab (fabrication plant) in Dholera, Gujarat, in collaboration with Taiwan-based Powerchip Semiconductor Manufacturing Corp. It will have the capacity to produce 50,000 wafers each month. One wafer has approximately 5,000 chips. This plant will be set up at a projected cost of Rs 91,000 crore.

In a press release, the Ministry of Electronics and Information Technology informed that high-performance compute chips with 28 nm technology and Power management chips for electric vehicles (EV), telecom, defence, automotive, consumer electronics, display, and power electronics, will be the segments covered under this fab. The ministry said that power management chips are high voltage, high current applications.

The Tata Semiconduct fab unit was announced by Tata Group Chairman N Chandrasekaran during the Vibrant Gujarat Summit in January this year, saying that the operations will start this year itself.

The second project to be approved by the union cabinet is a semiconductor testing and packaging unit by Tata Semiconductor Assembly and Test Pvt Ltd in Jagiroad in Morigaon district, Assam. This unit will be set up with an investment of Rs.27,000 crore. The unit will have a capacity of 48 million per day. TSAT Semiconductor is developing indigenous advanced semiconductor packaging technologies including flip chip and ISIP (integrated system in package) technologies. The unit will produce chips for automobiles, electric vehicles, consumer electronics, telecom, mobile phones, etc.

The Assam unit by Tata Group was announced by Assam CM Himanta Biswa Sarma in December 2023.

CG Power, based in Mumbai, will also establish an Assembly, Testing, Marking, And Packaging (ATMP) facility in Sanand, Gujarat in partnership with Renesas Electronics Corp. of Japan and Stars Microelectronics of Thailand. The ministry said that this unit will be set up with an investment of Rs.7,600 crore. With a capacity of 15 million per day, the CG power semiconductor unit will manufacture chips for consumer, industrial, automotive and power applications.

Outlining the strategic significance of these semiconductor plants, the ministry said, “Within a very short time, India Semiconductor Mission has achieved four big successes. With these units, the semiconductor ecosystem will get established in India. India already has deep capabilities in chip design. With these units, our country will develop capabilities in chip fabrication. Advanced packaging technologies will be indigenously developed in India with today’s announcement.”

Notably, these three semiconductor fabs will create thousands of direct and indirect jobs. These units will generate 20,000 direct jobs in high technology and over 60,000 indirect jobs. These units will stimulate job creation in downstream automotive, electronics, telecom, industrial, and other semiconductor-consuming industries.

Speaking about this significant leap, Minister Ashwini Vaishnaw said, “Today the Prime Minister has taken an important decision to set up semiconductor fabs in the country. The first commercial semiconductor fab will be set up by Tata and Powerchip-Taiwan, whose plant will be in Dholera…”

“…All three units will start construction within the next 100 days. 50,000 wafers per month will be manufactured. 300 crore chips will be manufactured annually through this facility. Northeast will get its first semiconductor Unit in Assam. 48 million chips per day will be manufactured from here. Cumulative investment in all three units will be one lakh twenty-six thousand crore. The breakdown is investment in FAB will be 91,000 crore. Investment in the Assam unit will be 27,000 crore. Investment in the Sanand unit will be Rs 7,600 crore…” Minister Vaishnaw added.

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