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India as chipmaker for world: Govt approves semiconductor plant investments worth $15bn

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Indian Prime Minister Narendra Modi’s cabinet green-lit several proposals which also include Tata Group’s plan to build an $11billion site which will be the country’s first major chipmaking facility

As Prime Minister Narendra Modi seeks to make India the chipmaker for the world, the Indian government on Thursday (Feb 29) approved the construction of three semiconductor plants worth $15.2 billion by companies including Tata Group and CG Power.

Chips, or semiconductors, are at the heart of a new kind of competition between major players, with China and US pitted against each other in what’s called ‘chip wars’.

The announcement by the Indian Minister of Electronics and Information Technology Ashwini Vaishnaw comes as the country has sought to become an electronics powerhouse. 

‘A big decision’

Indian Prime Minister Narendra Modi’s cabinet green-lit several proposals which also include Tata Group’s plan to build an $11 billion site which will be the country’s first major chipmaking facility. 

New Delhi expects its semiconductor market to be worth $63 billion by 2026 but has faced some setbacks in the past and also does not have a chipmaking facility, yet.

“This is a big decision for the country and a key accomplishment towards making India a self-dependent country,” Vaishnaw told reporters on Thursday. He also said that the construction of these plants will begin within the next 100 days. 

These factories will reportedly manufacture and package chips for sectors including defence, automobiles and telecommunication.

About the proposals

The government also cleared Tata Group’s separate proposal for a chip assembly plant which will reportedly cost over $3 billion as well as a packaging venture between Japan’s Renesas Electronics Corp and the Murugappa Group’s CG Power. 

Tata Group will partner with Taiwan’s Powerchip Semiconductor Manufacturing Corp for its project of building India’s first chipmaking plant. 

The new facility will produce so-called mature chips – which use 40-nanometer or older technology – typically used in consumer electronics, automobiles, defence systems and aircraft, reported Bloomberg. 

“This fab (semiconductor fabrication facility) will have manufacturing capacity of up to 50,000 wafers per month and will include next generation factory automation capabilities deploying data analytics and machine learning to achieve industry-best factory efficiency,” the Tata Group said in a statement.

The new semiconductor fab will be built in the Indian town of Dholera in Gujarat, according to the Tata Group and will create over 20,000 direct and indirect skilled jobs in the region. 

CG Power will partner with Japan’s Renesas Electronics Corp and Thailand-based Stars Microelectronics for a $91.6 million chip packaging plant, also in the Indian state of Gujarat. 

According to the Indian minister, a third chip packaging plant worth $3.3 billion will be set up in the north-eastern state of Assam by Tata unit Tata Semiconductor Assembly and Test Pvt Ltd. 

Semiconductors have been making headlines, particularly since the so-called chip war between the United States and China amid geopolitical tensions which has prompted other countries to ramp up development domestic capabilities, including India.

(With inputs from agencies)

James Mackreides
James Mackreides
'Mac' is a short tempered former helicopter pilot , now a writer based in Sofia, Bulgaria. Loves dogs, the outdoors and staying far away from the ocean.

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