In a significant move aimed at bolstering Bharat’s semiconductor industry, the Union Cabinet has given the green light to three major projects, collectively worth Rs 1.26 lakh crore, under the government’s $10 billion capex-linked incentive scheme. These projects mark a significant stride towards bolstering Bharat’s semiconductor manufacturing capabilities.
However, one proposal didn’t make it to the Cabinet’s approval table was Israel’s Tower Semiconductor’s $11 billion fab proposal. Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar, highlighted the importance of Tower Semiconductor’s proposal, emphasizing its complexity and the need for thorough examination due to its substantial scale.
Tower Semiconductor’s proposal stands out due to its ambitious plans for an 80,000 wafers per month fabrication facility, significantly larger than the typical 40,000 wafer fabs. This extensive build-out requires careful consideration, as it exceeds the scope of the existing six-year scheme. Furthermore, Tower Semiconductor’s status as a foundry company adds layers of complexity to the proposal, as it necessitates a unique investment approach.
Chandrasekhar underscored that Tower Semiconductor’s proposal aligns with the government’s criteria, focusing on companies directly involved in foundry operations or holding licensing agreements with foundries. The proposal’s innovative nature and the potential for India to emerge as a key player in the semiconductor market further underscore its significance.
The approval of the three semiconductor projects on February 29 signifies a concerted effort to enhance India’s semiconductor ecosystem. Among these projects, Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corp. (PSMC) are set to establish India’s first semiconductor fabrication plant (fab) in Gujarat’s Dholera, with an estimated cost of Rs 91,000 crore. Additionally, Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) will establish a semiconductor unit in Assam, while CG Power, in collaboration with Renesas Electronics Corp., Japan, and Stars Microelectronics, Thailand, will set up a semiconductor assembly, testing, marking, and packaging unit in Gujarat’s Sanand.
Chandrasekhar emphasized that these investments align with India’s vision to become a significant semiconductor consumer, projecting to reach $110 billion in semiconductor consumption by 2028. With China and North America currently leading in semiconductor consumption, India’s strategic investments aim to propel the nation into a prominent position in the global semiconductor landscape.
As the government continues to assess Tower Semiconductor’s proposal and evaluates additional investments in the semiconductor sector, the focus remains on fostering indigenous semiconductor manufacturing capabilities. These initiatives not only aim to reduce reliance on imports but also position India as a key player in the semiconductor industry, contributing to technological advancement and economic growth.
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