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Major advancement for India’s Semiconductor Mission: Cabinet greenlights establishment of three additional semiconductor facilities

The Union Cabinet, led by Prime Minister Shri Narendra Modi, has given its approval for the establishment of three semiconductor units as part of the ‘Development of Semiconductors and Display Manufacturing Ecosystems in India’ initiative. Construction for all three units is slated to commence within the next 100 days.

The program for developing semiconductor and display manufacturing ecosystems in India was initially announced on December 21, 2021, with a total budget allocation of Rs. 76,000 crore. Earlier, in June 2023, the Cabinet had sanctioned Micron’s proposal to set up a semiconductor facility in Sanand, Gujarat. Progress on this unit’s construction has been rapid, contributing to the emergence of a robust semiconductor ecosystem in the vicinity.

The three newly approved semiconductor units are as follows:

1. Semiconductor Fab with 50,000 wafer starts per month (WSPM):
Tata Electronics Private Limited (TEPL) will collaborate with Powerchip Semiconductor Manufacturing Corp (PSMC) from Taiwan to establish this semiconductor fab in Dholera, Gujarat, with an investment of Rs. 91,000 crore. PSMC is renowned for its expertise in logic and memory foundry segments and currently operates six semiconductor foundries in Taiwan. The fab will focus on producing high-performance compute chips with 28 nm technology and power management chips for various applications, including electric vehicles, telecom, defense, automotive, consumer electronics, display, and power electronics.

2. Semiconductor ATMP unit in Assam:
Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) will set up this unit in Morigaon, Assam, with an investment of Rs. 27,000 crore. The facility will have a capacity of 48 million units per day and will specialize in advanced semiconductor packaging technologies such as flip chip and integrated system in package (ISIP). The unit will cater to sectors like automotive, electric vehicles, consumer electronics, telecom, and mobile phones.

3. Semiconductor ATMP unit for specialized chips:
CG Power, in partnership with Renesas Electronics Corporation from Japan and Stars Microelectronics from Thailand, will establish this unit in Sanand, Gujarat, with an investment of Rs. 7,600 crore. Renesas is a leading semiconductor company known for its expertise in specialized chips, operating 12 semiconductor facilities globally. The CG Power semiconductor unit will manufacture chips for consumer, industrial, automotive, and power applications.

The strategic significance of these units lies in their contribution to establishing a semiconductor ecosystem in India, enhancing capabilities in chip design and fabrication, and developing advanced packaging technologies domestically. Additionally, these units are expected to generate significant employment opportunities, including 20,000 direct jobs and approximately 60,000 indirect jobs. They will also catalyze employment growth in downstream industries such as automotive, electronics manufacturing, telecom manufacturing, and industrial manufacturing.

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