New Delhi, 29 Feb

The Union Cabinet on Thursday approved proposals to set up three semiconductor plants, including a mega fab by Tata Group, at a cumulative investment of Rs 1.26 lakh crore, as India moves to position itself as a global powerhouse in chip manufacturing.

The government is offering incentives of up to Rs 76,000 crore to boost domestic manufacturing of semiconductors, which are essential components of electronic devices and find usage in mobile phones, laptops, refrigerators, washing machines and automobiles, among others.

The three units approved for support under the scheme will make chips for various sectors, including defence, automobiles and telecommunications, and will begin construction within the next 100 days, Minister for Electronics and IT Ashwini Vaishnaw told reporters after the cabinet meeting.

"This is a decisive moment for India and underlines the Atmanirbhar Bharat promise. By 2029, India will emerge as a major semiconductor manufacturing hub in the world," Vaishnaw said, describing the three proposals as a "giant leap" for the country.

Tata Electronics Pvt Ltd will set up a semiconductor fab in partnership with Taiwan's Powerchip Semiconductor Manufacturing Corp at Dholera's special industrial region in Gujarat. The plant will have the capacity to produce 50,000 wafers per month and involve an investment of Rs 91,000 crore.

These chips driven by advanced technology will cater to multiple sectors -- Power management chips for electric vehicles (EV), telecom, defence, automotive, consumer electronics, display, and power electronics. Semiconductor is a "foundational" industry touching almost every aspect of life, powering everything from fridges to ACs and cars, aircraft to trains.

The government has also approved a proposal by Tatas to build a greenfield semiconductor assembly and test facility in Jagiroad, Assam. The facility will be built with an investment outlay of Rs 27,000 crore and is expected to generate over 27,000 direct and indirect jobs in the region. Notably, this will be India's first semiconductor unit in the Northeast.

Tata Semiconductor Assembly and Test (TSAT) will develop indigenous advanced semiconductor packaging technologies, including flip chip and ISIP (integrated system in package) technologies, with a capacity of 48 million chips per day. The target segments for these would be automotive, electric vehicles, consumer electronics, telecom, and mobile phones, among others.

The third proposal was by CG Power, which in partnership with Renesas Electronics Corp and Stars Microelectronics of Thailand, will set up a unit in Sanand in Gujarat at an investment of Rs 7,600 crore. Renesas is a leading semiconductor company focussed on specialised chips. It operates 12 semiconductor facilities and is an important player in microcontrollers, analogue, power, and system-on-chip products. The plant will have a capacity for 15 million chips per day, and CG Power semiconductor unit will manufacture chips for consumer, industrial, automotive and power applications.

The three proposals cumulatively entail investments worth over Rs 1.26 lakh crore. The three proposals, along with the Micron unit that was approved earlier, will utilise broadly Rs 59,000 crore of support out of the Rs 76,000 crore incentives. In the near future, more semiconductor proposals are expected to come up, the minister said.