India Okays US$15 billion of milestone chip plant investments

Bloomberg - India’s government has approved US$15.2 billion worth of investments in semiconductor fabrication plants, including a Tata Group proposal to build the country’s first major chipmaking facility.

Indian Prime Minister Narendra Modi’s Cabinet approved Tata’s plan to build a US$11 billion site that can fabricate about 50,000 wafers per month, Indian Minister of Railways, Communications and Electronics and Information Technology Ashwini Vaishnaw told reporters in New Delhi yesterday.

The Indian government also cleared Tata’s separate proposal for a US$3 billion-plus chip assembly plant, and a packaging venture between Japan’s Renesas Electronics Corp and the Murugappa Group’s CG Power and Industrial Solutions Ltd.

“We will start construction of this plant within 100 days,” the minister said during the briefing, referring to Tata’s fab.

India hopes to attract chip giants to boost its domestic manufacturing sector. The government has offered to shoulder half the cost of any approved projects, up to an initial ceiling of US$10 billion. The semiconductor fund has already helped US memory maker Micron Technology Inc establish a US$2.75 billion assembly facility in Gujarat.

Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC, 力積電) yesterday confirmed that it would assist Tata Electronics Pvt Ltd to build India’s first 12-inch wafer fab in Dholera, Gujarat.

The fab construction will begin this year, Powerchip said in a statement, adding that the new facility is expected to create more than 20,000 jobs in India.

Through the cooperation with Powerchip, Tata Electronics, a subsidiary of Tata conglomerate, plans to produce power management ICs, display driver ICs as well as microcontrollers and high-performance computing logic chips as it aims to enter the automotive, computing and data storage, wireless communications, artificial intelligence and other end markets, the Taiwanese chipmaker said.

Semiconductors have grown into a key geopolitical battleground, with the US, Japan and China investing heavily in developing domestic capabilities.

The cooperation between PSMC and Tata is “indeed timely” at this critical moment of the global restructuring of high-tech supply chain, Powerchip chairman Frank Huang (黃崇仁) said in the statement.