Modi inaugurates India's first commercial semiconductor fab in 30 years

Jerry Chen, DIGITIMES Asia, Taipei 0

Credit: ITA

The new fab kickstart India's grand plan to build a semiconductor ecosystem.

Indian Prime Minister Shri Narendra Modi inaugurated the three semiconductor facilities during a live virtual conference on March 13. The plants are collectively worth INR1.25 trillion (US$ 15 billion).

The online event, dubbed "India's Techade: Chips for Viksit Bharat," saw the Indian leader address the country's youth. It marked a significant milestone between Taiwan and India in semiconductor collaboration.

"Today is a historic day" Modi said. "We are scripting history & taking a strong step ahead towards a bright future," he added.

A new beginning

The most high-profile project amongst the trio of projects announced was the chip-making plant at Dholera, Gujarat. The Dholera plant was jointly established by the Taiwan-based Powerchip Semiconductor Manufacturing Corporation (PSMC) and Tata Electronics.

The 300mm (12-inch) wafer fab is set to produce chips with 28nm processing technology. It will be India's first commercial semiconductor fab in 30 years.

The facility is expected to have a monthly production capacity of 50,000 wafers. Production is expected to commence by the end of 2026.

The plant is estimated to create more than 20,000 skilled jobs. Investment in the Dholera fab is INR 910 billion.

70% of the investment comes from India's government (50% subsidized by the Modified Programme for Semiconductors and Display Fab Ecosystem scheme, 20% by the local subsidies). The remainder is funded by the Tata Group.

PSMC will not invest or operate the facility directly. It will be responsible for transferring its technology to the Indian operators, and employee training.

The process will be led by PSMC's Manufacturing IP Transfer Department. PSMC will earn royalties for its technology transfers.


Fab IP is PSMC's latest flagship IP transfer strategy. The company aims to leverage its long-term experience in plant construction and semiconductor manufacturing technology to assist other countries in building semiconductor plants.

Previously PSMC Chairman Frank Huang said the collaboration with India follows Taiwan President Tsai Ing-wen's directive to assist India in building a semiconductor plant. The video conference also saw the participation of Taiwan's senior government officials and industry leaders from the offices of the India-Taipei Association where their virtual attendance was acknowledged by Prime Minister Narendra Modi.

Taiwan-based outlet CTEE reported that PSMC is in talks with Vietnam's government to help the nation build its own fab. Reportedly the company's disussion with the Vietnamese government began in late 2023.

Vietnam's ambition to establish its first wafer fab mirrors India's aspirations of building its own semiconductor and technology industry supply chain.

A foundation for future collaborations

"I feel that this marks a new chapter in the relationship between Taiwan and India," said Chung-kwang Tien, Taiwan's Deputy Minister of Foreign Affairs. The deputy minister believes this semiconductor collaboration elevates the Taiwan and India relationship to the next level, thanking the efforts of PSMC and the Indian government.

Director-General of the Bureau of Foreign Trade Jen-Ni Yang echoed Chung's view. She described the hard-earned progress of the project as laying the basic foundation of more Taiwan-India collaborations moving forward.

Yang said she wishes to seek further trade agreement opportunities for Taiwanese businesses going forward.

Director General of India Taipei Association, Mr. Manharsinh Laxmanbhai Yadav said the collaboration fortifies the growing partnership between India and Taiwan. It highlights the shared commitment to technological advancement and innovation from both sides, he added.

Modi also announced two Outsourced Semiconductor Assembly and Test (OSAT) facilities. One is operated by Tata Group in Morigaon, Assam while the other by CG Power and Industrial Solutions Limited in Sanand, Gujarat.

INR 270 billion was invested in The Tata Group OSAT plant, creating 30,000 employment opportunities.

Tata Sons Pvt. Ltd. Chairman Natarajan Chandrasekaran believes its new manufacturing and packing hubs will have a lasting impact on India. India is now the preferred semiconductor destination of the world, he added.

CG Power and Industrial Solutions Chairman Vellayan Subbiah said CG aims to build a semiconductor cluster in a concentrated location similar to the ones in Taiwan. INR 75 billion was invested in CG Power's new OSAT plant.