India’s Push for Semiconductor Manufacturing: A Growing Trend

In a significant development aimed at boosting semiconductor manufacturing capabilities, the Indian government has received 18 proposals for the construction of semiconductor fabs. These proposals come as part of schemes designed to bolster semiconductor production within the country.

Breakdown of Proposals

According to IT Minister Rajeev Chandrasekhar, who disclosed the information in response to a question, the proposals encompass a range of initiatives. Specifically, four proposals have been received for the establishment of semiconductor fabs, while an additional 13 proposals focus on constructing compound semiconductor fabs and ATMP (assembly, testing, marking, and packaging) facilities.

Key Initiatives and Investments

A noteworthy highlight among these proposals is the approval for the construction of a semiconductor ATMP facility by Micron Technology, involving an investment of INR 22,516 crore ($2.75 billion). This significant investment underscores the commitment of both the Indian government and global semiconductor companies to enhancing domestic manufacturing capabilities.

Modified Programme for Semiconductors and Display Fab Ecosystem

These proposals have been made under the Modified Programme for Semiconductors and Display Fab Ecosystem, a $10 billion scheme authorized by the Indian government in December 2021. This program provides companies with the opportunity to apply for up to 50 percent of capital costs for eligible semiconductor and display manufacturing projects, incentivizing investment in this critical sector.

Industry Participation: Tower Semiconductor and Foxconn

While Micron’s investment has been highlighted prominently, it has also come to light that Tower Semiconductor, an Israeli company, has submitted a proposal for the construction of an $8 billion chip fabrication plant in India. If approved, Tower Semiconductor plans to manufacture 65nm and 40nm chips for use in automotive and wearable electronics, further diversifying India’s semiconductor production capabilities.

Additionally, Foxconn, a key player in the global electronics industry, has entered into a joint venture with HCL Group to establish an outsourced assembly and testing (OSAT) facility in India. This venture underscores the growing interest of multinational corporations in leveraging India’s manufacturing ecosystem for semiconductor-related activities.

A Transformative Shift in Semiconductor Manufacturing

The influx of proposals for semiconductor manufacturing facilities marks a transformative shift in India’s semiconductor landscape. With increasing investments and partnerships, India is positioning itself as a significant player in the global semiconductor industry. The government’s initiatives and incentives, coupled with the participation of leading semiconductor companies, are expected to accelerate the country’s journey towards self-reliance in semiconductor manufacturing and contribute to its economic growth and technological advancement.