Cabinet greenlights Tata’s INR 91,000-crore chip foundry proposal – ET Auto

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Cabinet greenlights Tata’s INR 91,000-crore chip foundry proposal – ET Auto


Tata group firm Tata Electronics has partnered with Taiwan’s chip manufacturing firm Powerchip Semiconductor Manufacturing Corp (PSMC) for the joint venture, which will be set up in Dholera in Gujarat.

The Union Cabinet on Thursday approved incentives for Tata Group’s proposal to set up a semiconductor foundry with a cumulative investment of INR 91,000 crore.

This will pave the way for India’s first commercial fab, a long-standing ambition of New Delhi. India has been making serious efforts for the last few years to localise chip assembly and production to safeguard its commercial as well as strategic interests in line with other major economies of the world.

With the approval of Tata Electronics’ proposal to set up the foundry unit, India will now be looked at globally as a serious player in the semiconductor market, union minister for electronics and information technology Ashwini Vaishnaw told a select gathering of journalists post the Cabinet briefing.

The Cabinet also greenlighted two proposals to set up assembly, testing, marking and packaging (ATMP) unit from the Tata Group’s Tata Semiconductor Assembly and Test (TSAT) and one from the CG Power-Renesas combine, which will set up their units at Morigaon in Assam and Sanand in Gujarat, respectively. While the TSAT proposal is worth INR. 27,000 crore that of CG Power is worth INR. 7,600 crore.

Cumulatively, the three projects involve an investment outlay of INR 1,26,000 crore, of which INR 47,704 crore will be footed by the Central government in terms of subsidies under the INR 76,000 crore India Semiconductor Mission. In total, they will create 26,000 advanced technology jobs and one lakh indirect jobs.

Tata group firm Tata Electronics has partnered with Taiwan’s chip manufacturing firm Powerchip Semiconductor Manufacturing Corp (PSMC) for the joint venture, which will be set up in Dholera in Gujarat. ET had reported on February 20 that the Tata group is in talks with PSMC for a likely partnership for the chip unit.

“Tata Group has a tradition of pioneering many sectors in the country, and we are confident that our entry in semiconductor fabrication will add to this legacy,” Tata Group chairman N Chandrasekaran said.

“Semiconductor industry presents a large and growing opportunity, and India is uniquely placed to capture this opportunity. There could not have been a better time for India to make its entry into the semiconductor manufacturing industry,” PSMC group chairman Frank Hong said.

The construction of the ambitious project will start within the next 100 days. “A semiconductor foundry is a foundational industry which will have significant impact on the downstream industries such as laptop, server, mobile equipment and domestic electronic equipment industries,” Vaishnaw said.

The foundry will manufacture high-performance chips in the 28, 50, 55, and 90, and 110 nanometre categories, Vaishnaw added.

The development is “pathbreaking as it paves the way for redefining India’s contribution to the global semiconductor industry. This is something we have been waiting for the last 40 years and now it’s finally happening,” said Ajai Chowdhry, co-founder of the HCL Group.

The Tata-PSMC semiconductor plant will manufacture 50,000 wafer starts per month. One wafer start has about 5000 chips. In total, this plant will churn out 300 crore chips per year, which will cater to the demand in high-power compute, electric vehicles, telecom, defence, consumer electronics, automobile and power electronics.

Apart from the proposal for the foundry, The TSAT unit, to be set up for a total investment of INR 27,000 crore is expected to have a capacity of 48 million chips per day and will cater to the automotive, electric vehicles, consumer electronics, telecom and mobile phones, among other product segments.

“This is a bonded project, where the customer which needs the assembly, testing and other services will give the Tata group the know-how and they will be executing it. It will be a high-volume kind of unit,” the union minister of state for electronics and information technology Rajeev Chandrasekhar said.

On the other hand, the ATMP unit proposed by CG Power in partnership with Renesas Electronics Corp of Japan and Stars Microelectronics of Thailand will fulfil the demand for specialised chips from the consumer, industrial, automotive and power sectors. The unit is expected to have a capacity of 15 million chips per day and need an investment of INR 7,600 crores.

Overall, the total ATMP capacity in the country, including that from Sanand-based Micron, will now be 80.5 million chips per day, Vaishnaw said.

“In addition to bolstering India’s Semiconductor Mission effort, all three entities will significantly contribute to the nation’s employment creation. I truly believe this step will go a long way in the creation of a thriving semiconductor ecosystem in the nation for the world,” Ajai Chowdhry, the founder of semiconductor focussed policy advocacy group Epic Foundation said.

  • Published On Mar 1, 2024 at 07:52 AM IST

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