Giant leap for India’s semiconductor mission

This strategic move marks a significant leap towards establishing India's first state-of-the-art semiconductor fab, alongside two advanced packaging and test facilities. The plan is to break ground on these three plants within 100 days.

India's foray into semiconductor manufacturing includes an $11-billion joint venture between Taiwan's Powerchip Semiconductor (PSMC) and Tata Electronics, a subsidiary of the $370-billion Indian conglomerate, Tata. This collaboration promises the production of chips using 28-, 40-, 55-, and 110-nanometer technology nodes, with an initial capacity of 50,000 wafers per month. Despite not being at the forefront of chip technology, these nodes are crucial for a wide array of chipmaking, with 28nm representing the most advanced planar CMOS transistor technology in the venture's repertoire.

The planned fab, to be located in the newly established industrial zone in Dholera, Gujarat –Prime Minister Narendra Modi's home state – is expected to catalyse the creation of over 20,000 skilled jobs, both directly and indirectly. Tata anticipates that the facility will manufacture chips for various applications, including power management, display drivers, microcontrollers, and high-performance computing logic, addressing the core needs that were highlighted by the chip shortage experienced during the pandemic era.

In addition to the semiconductor fab, the government's investment extends to two assembly, test, and packaging facilities, diversifying India's role in the semiconductor supply chain, a sector predominantly based in Southeast Asia. Tata Electronics is set to construct a $3.25 billion plant in Jagiroad, Assam, introducing a spectrum of packaging technologies and eyeing future advancements in 3D integration and other advanced packaging methods. Expected to commence production in 2025, this facility is projected to significantly boost the local economy by adding 27,000 jobs.

Furthermore, a collaborative venture involving Japan's Renesas, Thailand's Stars Microelectronics, and India's CG Power and Industrial Solutions will see the creation of a $900 million packaging plant in Sanand, Gujarat, enhancing the region's burgeoning semiconductor ecosystem, which already anticipates a Micron packaging and test facility as part of a previous agreement.

India's semiconductor market, valued at $22 billion in 2019, is on an explosive growth trajectory, with expectations to surge to $64 billion by 2026, and further to $110 billion by 2030. This growth is underpinned by India's substantial pool of semiconductor design engineers, accounting for about 20% of the world's total according to an IT&IF report.

The recent government investment aims not only to meet the burgeoning domestic demand but also to attract new talent into the semiconductor industry, promising a bright future for India's technological advancement and self-reliance in the semiconductor domain.