India Approves $15 Billion Investment for Three Semiconductor Plants, Aims to Become Major Chip Hub

India has recently approved the construction of three semiconductor plants with investments totaling over $15 billion. This move is part of India's push to establish itself as a key player in the global semiconductor industry.

Building Capabilities in Chip Fabrication

According to a government statement, India already possesses strong capabilities in chip design. The approved semiconductor plants will enable the country to develop its capabilities in chip fabrication. Additionally, advanced packaging technologies will be indigenously developed in India.

Strategic Partnerships and Investments

One of the fabrication plants will be built in Dholera, Gujarat, through a partnership between Tata Electronics and Taiwan's Powerchip Semiconductor Manufacturing Corp. This venture will see an investment of nearly $11 billion. Another plant will be established in Morigaon, Assam, by Tata Semiconductor Assembly and Test Pvt Ltd, with an investment of $3.26 billion. The third factory, to be set up in Sanand, Gujarat, will be a collaboration between CG Power, Japan's Renesas Electronics Corporation, and Thailand's Stars Microelectronics, with an investment of nearly $1 billion. These factories will focus on producing chips for various sectors including automotive, consumer electronics, and defense.

Expansion of Semiconductor Ecosystem

With construction set to commence within the next 100 days, these factories are expected to significantly contribute to the semiconductor ecosystem in India. It is projected that they will directly create 20,000 advanced technology jobs and about 60,000 indirect jobs.

Geopolitical Impact and Strategic Moves

Global chip manufacturers have been seeking to diversify operations amid geopolitical uncertainty, and India's proactive measures in the semiconductor industry stand to benefit the country. This comes at a time when other nations, such as Japan, are also making efforts to bolster their chip-manufacturing industry.

In a related development, India had previously approved Micron for setting up a semiconductor unit in Sanand, Gujarat, in June 2023. The approval of the three new semiconductor plants marks significant progress for the India Semiconductor Mission.