Big leap for chip mission: 3 plants, Rs 1.26 lakh crore investment get Govt nod

• Recently, the Union Cabinet approved three semiconductor projects worth approximately Rs 1.26 lakh crore.
• This marked a significant step towards bolstering India's chip manufacturing capabilities.

Key Highlights

• The projects aim to address the growing demand for chips across various industries.
• This includes high-performance computing, electric vehicles, defence and consumer electronics.

The Projects

1. A semiconductor fab in Dholera, Gujarat

• This will be established by Tata Electronics in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corp.
• It will specialise in producing high-performance computer chips using 28 nm technology that will find applications in EVs, telecom, defence, etc.
• With a production capacity of 300 crore chips annually, this facility will play a crucial role in meeting the country's semiconductor needs.

2. A semiconductor unit in Morigaon, Assam

• This will be set up by the Tata Semiconductor Assembly and Test Pvt Ltd (TSAT), with an investment of Rs 27,000 crore.
• This is poised to churn out an impressive 48 million chips per day, catering to the automotive and electric vehicle sectors.

3. A semiconductor unit in Sanand, Gujarat

• This will be established by CG Power with an investment of Rs 7,600 crore.
• It is in conjunction with Japan’s Renesas Electronics Corp and Stars Microelectronics of Thailand.

Significance

• The approvals underscore India's efforts to strengthen its semiconductor industry amidst geopolitical tensions and global supply chain disruptions.
• The initiative is expected to bolster India's semiconductor market, projected to reach $63 billion by 2026.
• These developments are part of India's broader vision to position India as a global hub for semiconductor manufacturing.
• The projects are expected to create around 1 lakh indirect jobs, contributing to economic growth and offering leverage in the global chip industry.

Government Incentives

• The projects benefit from the government's Rs 76,000 crore chip incentive scheme, which provides subsidies for a plant's capital expenditure costs.
• There are also schemes like the production linked incentive (PLI) plan for smartphone and laptop manufacturing.
• Additionally, states offer incentives such as land acquisition benefits to attract semiconductor investments.

Prelims Takeaway

• Semiconductors
• Production Linked Incentive (PLI) Scheme