New semiconductor projects will drive up electronics manufacturing 3X to $300 billion: Ashwini Vaishnaw

New semiconductor projects will drive up electronics manufacturing 3X to $300 billion: Ashwini Vaishnaw

Four semiconductor projects approved under the Rs 76,000 crore ($10 billion) capex linked incentive scheme of the government will help drive up electronics manufacturing from $105 billion currently to $300 billion in the next few years, Union Minister Ashwini Vaishnaw said on February 28.

The Union Cabinet approved three projects under the scheme today worth Rs 1.26 lakh crore of investments, while one such plant by US semiconductor major Micron was given the greenlight last year.

"It is a remarkable achievement. It is a giant leap. Now, we are targeting to become a major player in the semiconductor value chain by 2029... PM Modi actually wants us to work on a 20 year vision for semiconductors," said Vaishnaw.

The proposals include India’s first semiconductor fabrication plant or fab to be set up by Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corp. (PSMC) in Gujarat’s Dholera at a projected cost of Rs 91,000 crore.

Vaishnaw said that the fab will mostly produce 28 nanometre (nm) chips, apart from 50 nm, 55 nm and 90 nm ones, and have 16,000 suppliers.

These will be power management chips for electric vehicles (EV), telecom, defence, automotive, consumer electronics, display, power electronics, etc. Power management chips are high voltage, high current applications.

Further, Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) will set up a semiconductor unit in Morigaon, Assam. This unit will be set up with an investment of Rs 27,000 crore and have the capacity to produce 48 million chips on a daily basis.

TSAT semiconductor is developing indigenous advanced semiconductor packaging technologies, including flip chip and ISIP (integrated system in package) technologies.

The application of these chips will be in automotive, electric vehicles, consumer electronics, telecom, mobile phones, etc.

The project is a semiconductor assembling, testing, marking and packaging unit for specialised chips. CG Power, in partnership with Renesas Electronics Corp., Japan and Stars Microelectronics, Thailand will set up this semiconductor unit in Sanand, Gujarat.

This unit will be set up with an investment of Rs 7,600 crore and build a capacity to produce 15 million chips per day. The CG power semiconductor unit will manufacture chips for consumer, industrial, automotive and power applications.

Despite offers of large subsidies, the government had been seen to be struggling till now to attract any major foreign foundry like Intel, Samsung ir TSMC to the country at a time when advanced economies like the US, Germany, the European Union and Japan have also announced large subsidy programmes in a global race to corner the semiconductor pie.

However, during Prime Minister Narendra Modi's visit to the US last year, semiconductor major Micron committed to set up a $2.7 billion assembling plant in the country. According to estimates, the Centre and state government of Gujarat will cumulatively bear 70 percent of the cost of the project in the form of subsidies.

Additionally, semiconductor equipment maker Applied Materials has said it would invest $400 million to design chipmaking machinery in the country and Microchip Technology has commiteed a $300 million investment to expand its semiconductor R&D footprint in India.