Tata's Bag Two Out Of Three Semiconductor Plants Cleared To Be Set Up In India

The Tata group’s Tata Electronics Private Limited will set up the Rs 91,000 crore semiconductor fab plant at Dholera in Gujarat in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corp.

While, another Tata firm -- Tata Semiconductor Assembly and Test Pvt Ltd (“TSAT”) -- will set up a semiconductor unit in Morigaon, Assam.

Murugappa Group’s CG Power, in partnership with Renesas Electronics Corporation, Japan and Stars Microelectronics, Thailand will set up the third semiconductor unit in Sanand, Gujarat, manufacturing specialised chips.

Race For Semiconductor Plant At Dholera

Interestingly, the Vedanta Group of UK-based Indian billionaire Anil Agarwal had signed an MoU with the Gujarat state government to set up the country's first semiconductor plant in Gujarat about a year ago.

However, in July last year, Foxconn, officially named Hon Hai Precision Industry, pulled out of the US $19.5 billion joint venture. Vedanta had, however, put on a brave front and spoken of going ahead with their plant with alternate partners.

However, it seems the central government took a call and decided the Tatas should be the group that would set up the giant plant costing Rs 91,000 crore, in collaboration with the Taiwanese microchip maker, which already runs six similar giant wafer manufacturing facilities.

The plant would have a capacity of 50,000 wafer starts per month (WSPM).

Cumulative investment in all three units is pegged at Rs 1.26 lakh crore. While the Dholera unit will cost about Rs 91,000 crore, “investment in the Assam unit will be Rs 27,000 crore and in the Sanand unit will be Rs 7,600 crore," Union Minister Ashwini Vaishnaw said.

Mid-last year, the Union Cabinet had approved the proposal of US-based chipmaker Micron to set up another semiconductor unit in Sanand, Gujarat.

Officials said the semiconductor plants -- the Micron's plant approved earlier and the three plants cleared on Thursday, February 29, -- will be set up under the central government’s units under ‘Development of Semiconductors and Display Manufacturing Ecosystems in India’ and construction work on all three will start within the next 100 days.

India Semiconductor Mission

Indian officials said that with these decisions, within a very short time, “the India Semiconductor Mission has achieved four big successes.” India already has deep capabilities in chip design. With these units, India is expected to develop capabilities in chip fabrication as well.

However, in contrast with Asian powerhouses like Taiwan, South Korea, Japan and China, India still has a long way to go and catch up with the missed bus of turning into a global maker of semiconductor chips.

According to the World Population Report document, Taiwan ranks 1st accounting for half of the global market with 77 factories as of December 2022. While South Korea ranks 2nd and Japan 3rd, China ranks 4th with a 9 per cent slice of the world market.

However, analysts expect this will change by 2026 with China going up the rankings ladder.