India to join high-stake global stage of chip manufacturing in 5 years: IT Minister Vaishnaw

India in the next five years will be part of the high-stake global stage of semiconductor manufacturers, combining unparalleled design capabilities with $10 billion of incentives that will attracting manufacturers for establishing new units for semiconductor fabrication plants, and lead to a cut in the dominance of Taiwan, South Korea and China, IT and Telecom Minister Ashwini Vaishnaw said.

The Union Minister said India's well-crafted policies are alluring manufacturers for setting up the new ‘fabs’, pouring investment in related sectors.

Semiconductors are an integral component of electronic devices, which are used in automobiles, computers, mobile phones and even washing machines.

India houses factories of best-known automobile companies from Renault-Nissan to Hyundai, computer manufacturers like Dell, Apple suppliers as well as electronics companies like Samsung which produce TVs, washing machines and fridges.

India is now looking at stepping up the value chain for manufacturing with a high-stake in semiconductor manufacturing. 

Prime Minister Narendra Modi-led government has provided incentives worth Rs 76,000 crore as part of setting up the units, which have attracted interest from four players including Micron and the Tata Group.

Union Minister Vaishnaw said the country already has about one-third of global design talent.

The government is leveraging this, as well as India's geopolitical clout in order to be an indispensable partner for the technological ambitions of the United States, which are looking at decoupling their supply chains from China akin to other western economies as well.

The draconian lockdowns of Beijing led to a disruption in the global chip supply chain, sending companies and governments on a hunt for alternative sources of production.

India presents itself as a tech hub which is democratic, and provides a trusted alternative to China.

"People who were earlier thinking when should we go to India or should we go to India...now they are asking how soon do we go to India...that is the change which is happening. This means, practically every big player would now like to reconsider their investment plans and come to India," he told PTI.

The minister specified a 5-year timeline when asked about when India would become a formidable player competing with known semiconductor destinations. 

The Union Cabinet last week greenlighted proposals for setting up three silicon chip plants, which include a mega fab by the Tata Group at a consolidated investment of Rs 1.26 lakh crore.

This is as India moved to position itself as an international powerhouse in semiconductor manufacturing.

"...it is very important for any developing country, an economy of our size, to have a semiconductor supply chain within the country. We have very strong design capabilities, as a corollary of design capabilities we must have the manufacturing capability also because that is where value gets added further," Vaishnaw explained.

The semiconductor plans will make India self-reliant, triggering a multiplier effect on the economy and various industries, and create jobs as well as spurring livelihoods, the Minister said.

"The semiconductor industry is a big multiplier for many more industries -- automobiles, electric vehicle, electronics, power electronics, defence -- every manufacturing sector requires semiconductors. So having that as a semiconductor value chain within the ecosystem will be pull for all of these," Vaishnaw said.

As per the announcements, Tata Electronics Pvt Ltd will partner with Taiwan's Powerchip Semiconductor Manufacturing Corp to set up a semiconductor fab at Dholera's special industrial region in Gujarat.

The plant will be able to produce 50,000 wafers per month, and encapsulates an investment of Rs 91,000 crore.

Driven by advanced technology, these semiconductors will cater to power management chips for electric vehicles (EV), telecom, defence, automotive, consumer electronics, display, and power electronics.

The government has also approved a proposal by Tatas to build a greenfield semiconductor assembly and test facility in Jagiroad, Assam. Built with an investment outlay of Rs 27,000 crore, the facility is expected to generate over 27,000 direct and indirect jobs in the region.

Notably, this marks the first semiconductor unit of the country in the northeast region.

Tata Semiconductor Assembly and Test (TSAT) will develop indigenous advanced semiconductor packaging technologies, which include flip chip and ISIP (integrated system in package) technologies and have a capacity of manufacturing 48 million chips per day. Target segments for the produced chips include automotive, electric vehicles, consumer electronics, telecom, and mobile phones, as well as others.

The third proposal having got the Cabinet nod is by CG Power, which will set up a unit in Sanand in Gujarat in partnership with Renesas Electronics Corp and Stars Microelectronics of Thailand. The project will entail an investment of Rs 7,600 crore.

India is aiming to attract global and domestic chip makers for setting up their production base in India with the multi billion dollar ($10 billion) incentive scheme.

Computer storage chip maker Micron was the first to announce the setting up its semiconductor assembly and test plant in Gujarat. The project, announced in 2023 at a total investment of $2.75 billion (around Rs 22,540 crore), would create 15,000 direct and indirect jobs in the region.

(With PTI Inputs)