India is set to step onto the high-stakes stage of chip manufacturing within the next five years. According to Union Minister of Information Technology and Telecommunications, Ashwini Vaishnaw, the country's unmatched design capabilities coupled with a staggering USD 10 billion incentive package are attracting manufacturers to establish cutting-edge semiconductor fabrication plants, or fabs, challenging the dominance of traditional players like Taiwan, South Korea, and China.
Semiconductors, the building blocks of modern electronic devices, from automobiles to smartphones and beyond, are integral to India's burgeoning technology sector. While the nation already hosts manufacturing facilities for renowned automobile and electronics companies, it now aims to ascend the manufacturing value chain with a strategic focus on semiconductors.
Under the leadership of Prime Minister Modi, the government's substantial incentives, totaling Rs 76,000 crore, have enticed major players, including industry giants like Micron and Tata Group, to invest in semiconductor manufacturing ventures in India.
Vaishnaw emphasized India's significant reservoir of design talent, comprising roughly one-third of the global workforce, as a catalyst for the country's semiconductor ambitions. Leveraging this talent pool and its geopolitical clout, India aims to position itself as a trusted alternative tech hub, particularly for Western economies seeking to diversify their supply chains away from China, especially in the wake of disruptions caused by Beijing's stringent lockdown measures.
With Beijing's recent lockdowns disrupting global chip supply chains, India's proposition as a democratic and reliable semiconductor manufacturing destination has gained considerable traction. Minister Vaishnaw remarked that the perception among global players has shifted from "when should we go to India" to "how soon do we go to India," indicating a paradigm shift in investment sentiment towards the country.
The ambitious semiconductor plans approved by the Indian Cabinet include the establishment of three semiconductor plants, including a mega fab by Tata Group, with a cumulative investment of Rs 1.26 lakh crore. These initiatives aim to make India self-reliant in semiconductor production, fostering economic growth, job creation, and technological innovation across various sectors, including automobiles, electronics, telecommunications, and defense.
Notably, Tata Electronics Pvt Ltd's semiconductor fab, in partnership with Taiwan's Powerchip Semiconductor Manufacturing Corp, will be located in Gujarat's Dholera special industrial region.
With an investment of Rs 91,000 crore, this facility will produce advanced chips catering to a diverse range of sectors, including electric vehicles, telecommunications, and consumer electronics.
Tata Group's proposal for a semiconductor assembly and test facility in Assam's Jagiroad, with an investment outlay of Rs 27,000 crore, marks India's foray into semiconductor manufacturing in the northeastern region. This facility is expected to generate over 27,000 direct and indirect jobs, contributing significantly to the region's economic development.
The Cabinet's approval of CG Power's semiconductor unit in Gujarat, in partnership with Renesas Electronics Corp and Stars Microelectronics of Thailand, highlights India's commitment to fostering a robust semiconductor ecosystem.
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