Centre clears 3 semiconductor plants with investment of Rs 1.26 lakh crore

The Union Cabinet on Thursday approved proposals to set up three semiconductor plants, two in Gujarat and one in Assam, at an estimated cost of Rs 1.26 lakh crore.

Addressing the media after the cabinet meeting, Union Minister Ashwini Vaishnaw said the construction work on all these three units will start in the next 100 days. “A typical semiconductor fab timeline for production is 3-4 years. But we will try to compress it,” Vaishnaw said.

India’s first commercial semiconductor fabrication plant or fab unit will be set up by a joint venture between Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corp at Dholera in Gujarat at an estimated cost of Rs 91,000 crore.

The plant will have a capacity to produce 50,000 wafers per month. One wafer has 5,000 chips. So the plant will have a capacity to produce 300 crore (3 billion) chips annually.

Another Tata Group company Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) will set up a semiconductor unit at Morigaon in Assam. The estimated cost of the plant is Rs 27,000 crore and it will have a capacity to produce 48 million chips per day.

TSAT semiconductor is developing indigenous advanced semiconductor packaging technologies including flip chip and ISIP (integrated system in package). The chips produced at Morigaon unit will be used in automotive industry, electric vehicles, consumer electronics, telecom and mobile phones.

The third unit, which has been approved by the cabinet, chaired by Prime Minister Narendra Modi, will also be located at Sanand in Gujarat. The plant will be set up by CG Power, in partnership with Japan’s Renesas Electronics Corp and Thailand’s Stars Microelectronics. It will be set up with an investment of Rs 7,600 crore and will have a capacity to produce 15 million chips per day.

These three plants are in addition to a Rs 22,516-crore chip assembly plant being set up at Sanand in Gujarat by the US-based chip maker Micron. The cabinet approval for Micron’s unit was given in June 2023. The plant is under construction.

With the new approvals Gujarat is set to emerge as semiconductor hub of the country with three of the four units being located in the eastern state.

The three units approved on Thursday will generate direct employment of 20,000 advanced technology jobs and about 60,000 indirect jobs, according to an official statement released by the Ministry of Electronics & IT.

“These units will accelerate employment creation in downstream automotive, electronics manufacturing, telecom manufacturing, industrial manufacturing, and other semiconductor consuming industries,” it said.