File picture of semiconductor equipment on display
| Photo Credit: Reuters

Tata Electronics, a wholly owned subsidiary of Tata Sons Pvt. Ltd, said it had completed the Definitive Agreement with Powerchip Semiconductor Manufacturing Corporation (PSMC) of Taiwan towards establishing semiconductor manufacturing facilities (aka fabs) in India.

As per the agreement, PSMC will provide design and construction support to build India’s first AI-enabled greenfield fab in Gujarat, license a broad portfolio of technologies and provide engineering support to successfully transfer licensed technologies to the Gujarat fab. 

 This fab will have manufacturing capacity of up to 50,000 wafers per month and will include next-generation factory automation capabilities deploying data analytics and machine learning to achieve industry-best factory efficiency. 

The new semiconductor fab will manufacture chips for applications such as power management IC, display drivers, microcontrollers (MCU) and high-performance computing logic, addressing the growing demand in markets such as AI, automotive, computing and data storage, and wireless communication, Tata Electronics said in a statement. 

With a total investment of up to ₹91,000 crores ($11 billion), the fab will create over 20,000 direct and indirect skilled jobs. 

With this fab, India for the first time will be able to address the growing chip demand of domestic and global customers. Tata Group’s multi-fab vision for Dholera is projected to create over 1,00,000 skilled jobs, the company said.

N. Chandrasekaran, Chairman, Tata Sons in a statement said, “This collaboration is a key milestone, and I am confident that our comprehensive technology partnership with PSMC will pave the way for innovation, drive growth, and strengthen the global semiconductor supply chain. It will position us to play a key role in the growing semiconductor market to serve global customers.”

Frank Huang, Chairman of Powerchip Group and CEO of PSMC, said, “This partnership represents a win-win situation, as it positions PSMC and the Taiwanese ecosystem to gain a significant first-mover advantage in the rapidly expanding Indian market while helping India achieve self-reliance in semiconductor manufacturing.”

“I strongly believe that our partnership will be foundational to the India-Taiwan collaboration in semiconductors and will inspire more commercial and strategic tie-ups between the two sides,” he said.

Tata Electronics said it has already engaged two design firms from Taiwan to create a top-tier fab that adheres to global standards of quality, safety, and sustainability. 

Prime Minister Narendra Modi speaks at the Semicon India 2023 event, in the presence of Gujarat Chief Minister Bhupendra Patel, Foxconn chairman Young Liu, Vedanta group chairman Anil Agarwal, Union IT Minister Ashwini Vaishnav, and Minister of State (Electronics and Information Technology) Rajeev Chandrasekhar, held at Mahatma Mandir, Gandhinagar, on Friday, July 28, 2023.
| Photo Credit: Vijay Soneji

Prime Minister Narendra Modi on July 28 said India would emerge as a global hub of semiconductor and chip-making industry, as he made a strong pitch to global investors, while inaugurating the ‘Semicon India 2023’ conclave in Gujarat. 

“Earlier, people were questioning our aim to make chips and were asking ‘why invest in India’. Now, the question has changed to ‘why not invest’ in India,” the PM said, adding the country was rolling out a red carpet to investors in the sector. 

“India understands that semiconductors are not just a national need but a necessity for the world,” Mr. Modi said, adding that attracting global players to set up their plants and supply chain network in the country is one of the top priorities of his government.

The second edition of ‘Semicon India’ is being held in Gandhinagar in the presence of leaders and representatives from various global semiconductor companies and start-ups. The three-day summit will conclude on Sunday.

“To expedite growth of the semiconductor sector in the country, we are continuously undertaking policy reforms and also working with partner countries for a comprehensive road map for semiconductor industry,” he said while listing the reform measures and tax incentives the government offers to the companies wanting to set up their factories in the country.

He also highlighted Internet penetration and fibre infrastructure in the country, availability of talent, huge market, besides a friendly and attractive corporate tax system. He also underlined the political stability in the country. 

In his speech, the Prime Minister touched upon the rapid development driven by India’s future aspirations, citing the reduction in extreme poverty and the widespread availability of affordable data connectivity which has reached even remote places in the country.

According to him, the country has made huge progress in the electronic manufacturing sector which has grown from $30 billion to over $100 billion, and talked about rising electronic manufacturing exports from the country and the presence of more than 200 mobile manufacturing units in India. 

At the ‘Semicon India’ conference, U.S. chipmaker Advanced Micro Devices announced plans to invest around $400 million in the country over the next five years and build its largest design centre in the tech hub of Bengaluru.

The conference was attended by the top representatives from major companies such as Micron Technology, Applied Materials, Foxconn, SEMI, Cadence, and AMD. 

Taiwan-based Foxconn chairman Young Liu said the company was focusing on India for its plant. “I can feel the determination of the Indian government. I am very optimistic of where it’s headed,” he said in his speech. 

It may be noted that Foxconn recently backed out out of a $19.5-billion joint venture with Indian conglomerate Vedanta Group to make semiconductors saying “the project was not moving fast enough”. Foxconn has since decided to go solo and is reportedly assessing potential sites in south India. 

Recently, the U.S.-based computer storage chip maker Micron announced setting up of a $2.75 billion semiconductor facility at Sanand near Ahmedabad. The announcement by the U.S. company would make Gujarat the first State in India to have a large-scale semiconductor-manufacturing facility.