India Invests $15B in Semiconductor Plants to Boost Chip Manufacturing
India has taken a major step toward becoming a global semiconductor hub by approving $15.2 billion (₹1.26 trillion) in investments for three new semiconductor plants. This strategic move aims to position India as a key player in chip manufacturing, competing with dominant markets like China and Taiwan.
Key Highlights of India’s Semiconductor Push
1. First Semiconductor Fab Facility in Gujarat
- Partnership: Tata Group and Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC)
- Location: Dholera Special Investment Region, Gujarat
- Capacity: 50,000 wafers per month, producing 3 billion chips annually
- Target Sectors: High-power computing, electric vehicles (EVs), telecom, and power electronics
- Timeline: Construction begins within 100 days, with an accelerated timeline compared to the typical 3-4 years.
2. Semiconductor Assembly & Testing Unit in Assam
- Investment: $3.2 billion
- Capacity: 48 million chips per day
- Applications: Automotive, EVs, consumer electronics, and mobile devices
- Market Reach: Supplies chips to Indian, American, European, and Japanese companies, serving both domestic and export demand.
3. Specialized Chip Facility in Gujarat
- Partnership: Japan’s Renesas Electronics, Thailand’s Stars Microelectronics, and India’s CG Power
- Investment: $916 million
- Focus: Niche sectors like defense, space, EVs, and high-speed trains
- Output: 15 million chips daily
India’s Semiconductor Ambitions: Challenges & Progress
Past Efforts & Revised Incentives
- In 2021, India launched a $10 billion incentive program to attract chipmakers, offering 50% subsidies on capital expenditures.
- Initial interest was low due to complex application processes and skepticism about India’s semiconductor ecosystem.
- The government revamped the program in 2023 to improve appeal.
Current Developments
- Employment Impact: The new plants are expected to create 20,000 direct jobs and 60,000 indirect jobs.
- Global Partnerships: While major players like TSMC, Intel, and Qualcomm were absent from recent announcements, companies like Micron, Foxconn, and AMD have already committed to Indian facilities.
- Long-Term Vision: The government plans a 20-year semiconductor strategy, leveraging India’s 300,000+ chip design engineers who already work with global firms.
Why AI Chips Aren’t the Focus (Yet)
Despite the AI boom, India’s current investments target general-purpose and specialized chips rather than AI-specific processors. This reflects a pragmatic approach to establishing foundational manufacturing capabilities first.
What’s Next for India’s Semiconductor Industry?
IT Minister Ashwini Vaishnaw hinted at more semiconductor initiatives in the near future, signaling India’s commitment to becoming a self-reliant chipmaker. With billions in incentives and a skilled workforce, India is poised to carve out a significant role in the global semiconductor supply chain.
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