HomeIndian Manufacturing Sector#MASSIVE: Union Cabinet approves 3 chip-making units with investment of ₹1.26-lakh crore

#MASSIVE: Union Cabinet approves 3 chip-making units with investment of ₹1.26-lakh crore

Source : The Hindu Business Line

#MASSIVE: Union Cabinet approves 3 chip-making units with investment of ₹1.26-lakh crore
Union Communications Minister Ashwini Vaishnaw at a press conference in New Delhi on Thursday. | Photo Credit: ANI

The Union Cabinet on Thursday approved proposals to set up three semi-conductor units with an investment of ₹1.26-lakh crore. Two of the units will be set up in Gujarat while third one will be in Assam. With this, India will have four units, with supply from first unit is expected by year end.

While Tata group will set up two units – Dholera (Gujarat) and Morigaon (Assam), CG Power will set up unit at Sanand (Gujarat). ‘Bhommi poojan for all three plants to take place soon and then, construction will start within 100 days,” Telecom Minister Ashwini Vaishnaw said in a press conference after the Cabinet meeting. Further he said that normally construction takes 3-4 years. However, “we have been able to compress the time for the Micron Unit and hope to repeat the same for all three plants,” he said.

Govt support

The units will make chips for sectors including defence, automobiles and telecommunications and will be set up under the ‘Development of Semiconductors and Display Manufacturing Ecosystem’ programme that provides government support of up to ₹76,000 crore, out of which ₹59,000 crore to be made available to these four plants.

Tata Electronics Pvt Ltd will set up a semiconductor fab in partnership with Taiwan‘s Powerchip Semiconductor Manufacturing Corp at Dholera in Gujarat. The plant will have a capacity to produce 50,000 wafers per month and involve an investment of ₹91,000 crore. This will produce high-performance compute chips with 28 nm technology for electric vehicles, telecom defence, automotive, consumer electronics, display and power electronics.

Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) will set up a semiconductor unit in Morigaon, Assam, at an investment of ₹27,000 crore.  Thids will have a capacity of 48 million per day for automotive, EVs, consumer electronics, telecom and mobile phones. CG Power in partnership with Renesas Electronics Corp and Stars Microelectronics of Thailand will set up a unit in Sanand in Gujarat at an investment of ₹7,600 crore. The CG power semiconductor unit will manufacture 15 million chips for consumer, industrial, automotive and power applications.

Commenting on Cabinet decision, N Chandrasekaran, Chairman, Tata Sons, said that with AI-led digitisation of every aspect of human existence, semiconductors will be the most critical building block. By 2030, global semiconductor industry is expected to grow to $ 1 trillion and Indian semiconductor demand is expected to cross $110 billion. “India’s entry in the semiconductor manufacturing will significantly de-risk global supply chains and will make India a very important player in the global semiconductor industry,” he said.

In June last year, the Cabinet approved a proposal of Micron for setting up a semiconductor unit in Sanand, Gujarat. The approvals are part of the Modi government’s ambitions to make India a chipmaker for the world and cutting reliance on countries like Taiwan.

“Within a very short time, India‘s 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,” he said.

These units will accelerate employment creation in downstream automotive, electronics manufacturing, telecom manufacturing, industrial manufacturing, and other semiconductor-consuming industries. “Construction of Micron’s Sanand unit is progressing at a rapid pace and a robust semiconductor ecosystem is emerging near the unit. We hope to start shipment by December this year,” the Minister said.

Boost to Semiconductor Production

  • Tata to get ₹33,998 crore as financial incentives for Dholera (Gujarat) project, ₹10,225 crore for Morigaon Assam) project
  • CG Power to get ₹3,501 crore as financial incentives for Sanand (Gujarat) project
  • India to have complete value chain – Design, Fab and AT
  • 3 plants to provide 26,000 direct employment, 1 lakh indirect employment
  • Proposals from 8 States to set up plants being looked upon
  • Boost in production to have positive impact on consumer product

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