The Union Cabinet on Thursday, February 29, approved the country’s first semiconductor fab to be made by the Tata Group in collaboration with Powerchip Taiwan. The semiconductor fab will come up in Dholera with a capacity of 50,000 wafers per month, said IT minister Ashwini Vaishnaw.

A net investment of INR 27,000 crore will go into the plant and 48 million chips per day will be produced from the unit, once the full capacity is reached.

The Cabinet on Thursday approved the setting up of three semiconductor plants in India, the Minister of Electronics & Information Technology announced. He said the construction of these plants will start in the next 100 days. 

“Today the Prime Minister has taken an important decision to set up a semiconductor fab in the country. The first commercial semiconductor fab will be set up by Tata and Powerchip-Taiwan whose plant will be in Dholera,” the minister said. 

Tata Electronics Private will set up a semiconductor fab in Dholera, Gujarat in partnership with Taiwan-based Powerchip Semiconductor Manufacturing Corp. 

Tata Semiconductor Assembly and Test Pvt Ltd will set up an INR 27,000 crore semiconductor unit in Morigaon, Assam. Mumbai-based CG Power will set up a semiconductor unit in Sanand, Gujarat in a tie-up with Renesas Electronics Corp, Japan, and Stars Microelectronics, Thailand.

These units will generate direct employment of 20,000 advanced technology jobs and about 60,000 indirect jobs.

Vaishnaw also said that the total investment in three semiconductor units is estimated to be INR 1.26 trillion. The Tata Electronics’ plant will have a capacity of producing 50,000 wafers per month. One wafer has 5,000 chips so the total will be around 3 billion chips per annum. 

TSA’s pllant will produce 48 million chips per day and CG Power’s 15 million chips per day.

Out of the total, INR 91,000 crore will be invested in Dholera, INR 27,000 crore in Assam and INR 7,600 crore in Sanand. 

These factories will be in addition to the INR 22,516 crore plant announced by US-based Micron in Sanand last year. 

In 2022, Prime Minister Narendra Modi had announced a semiconductor policy which attracted global attention.

At an event yesterday, Minister of State for Electronics & Technology Rajeev Chandrasekhar said, “Today, investment proposals of more than INR 2.50 trillion have been received by the Government of India from global semiconductor majors. India is fast becoming a semiconductor nation. Just two years ago, it was not even present in the semiconductor ecosystem of the world.” 

“The approval of three semiconductor units by the Union Cabinet, with an estimated cost of INR 1.26 trillion, signifies a watershed moment for India’s semiconductor industry. With construction set to commence within the next 100 days, this initiative underscores India’s commitment to fostering a robust semiconductor manufacturing ecosystem. We are especially proud to note that Tata Electronics and Renesas Electronics, both esteemed members of the India Electronics and Semiconductor Association (IESA), are pivotal players in this endeavour. Their involvement not only demonstrates their dedication to India’s technological advancement but also highlights the pivotal role of IESA in driving industry growth and innovation,” said, Sanjay Gupta, chairperson and Ashok Chandak, president, IESA.