India to join chip fab race with the groundbreaking of three units

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Computers to phones to cars to AI-driven applications, semiconductor chips are becoming so crucial that many are labelling chip fab units as the new crude, locking the US and China in a new race to attract investments in this sector. Significantly, within the next three months, work for three semiconductor units is set to begin in India marking the entry of India in this race, The Economic Times has reported.

The projects are located in two extremities of the country – Gujarat and Assam. The Tata Group owns two of the three projects – one in Gujarat’s Dholera at an expenditure of $11 billion and the other in Assam’s Morigaon for Rs 27,000 crore. The third one will be set up at Sanand in Gujarat. Murugappa Group company CG Power will set up this one at a cost of Rs 7,600 crore.

The three units come close on the heels of the Union Cabinet approving proposal for investment of $15.14 billion. Cumulatively, these three units are supposed to generate about 26,000 jobs for advanced technology professionals and about 100,000 indirect jobs.

Chip manufacturing has become so crucial that the Biden administration is reportedly readying a $10 billion incentive package to lure Intel Corp alone to set up its chip fab unit on US soil.

To set up its unit in Gujarat, the Tatas have tied up with Taiwan’s Powerchip Semiconductor Corp. CG Power has struck an alliance with Japan’s Renesas and Thailand’s Stars Microelectronics for its project in Sanand.

“The land bank has already been identified and demarcated (at all three places). The (land) allocation should happen in a few days. The permits are all lined up,” Union IT and electronics minister Ashwini Vaishnaw had told the newspaper earlier.

According to the report, a fourth unit is also supposed to come up in Sanand in Gujarat and this one is a manufacturing facility proposed by Micron, a company based in the US. The minister also emphasised that they would now focus on execution of these investments that, in the course of the next five years, would propel India into the global top five in chip fabrication.

The newspaper also quoted officials, who preferred anonymity, to say that most of the proposals required for the construction of the factory in Assam, are already in place. Some would flow in after the groundbreaking ceremony.

“Other permits and environmental clearances will be needed and issued as per the protocol when the need arises,” an official said.

The three projects approved on March 1 include total investment of $15.14 billion or Rs 126,000 crore. Of this Rs 47,704 crore would be provided by the Centre in terms of subsidies under the Rs 76,000 crore India Semiconductor Mission.