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India is rapidly emerging as a significant player in the global semiconductor manufacturing landscape, driven by substantial government support and strategic collaborations between domestic and international companies. The recent approval of the HCL-Foxconn chip plant in Uttar Pradesh marks another milestone in the country's ambitious India Semiconductor Mission, which aims to establish a robust and self-reliant semiconductor ecosystem. This initiative is crucial for reducing India's dependence on foreign sources for critical electronic components and fostering innovation in various sectors, including automotive, telecommunications, and consumer electronics. The HCL-Foxconn facility, with a planned investment of Rs 3,700 crore, will specialize in manufacturing display driver chips for a wide range of devices, including mobile phones, laptops, automobiles, and PCs. Its strategic location near the upcoming Jewar airport in the Yamuna Expressway Industrial Development Authority (YEIDA) underscores the importance of infrastructure development in supporting the growth of the semiconductor industry. The plant's projected monthly output of 20,000 wafers, translating to 36 million units per month, demonstrates its potential to significantly contribute to the domestic supply of these essential components. Production is slated to commence in 2027, indicating a carefully planned timeline for construction and equipment installation. The establishment of the HCL-Foxconn plant is not an isolated event but rather part of a broader trend of increased investment and activity in India's semiconductor sector. The India Semiconductor Mission has already approved five other semiconductor facilities, which are currently in advanced stages of construction. These facilities are strategically located across different states, reflecting a concerted effort to distribute the benefits of semiconductor manufacturing across the country. Gujarat, in particular, has emerged as a major hub for semiconductor manufacturing, with three facilities based in Sanand. These include a plant by Micron Technologies, an assembly and testing unit by Kaynes Technologies, and a collaborative venture involving CG Power-Renesas Electronics and Star Microelectronics. The Tata Group is also making significant investments in semiconductor manufacturing, with one facility being built in Dholera, Gujarat, and another in Assam. These projects highlight the growing confidence of both domestic and international companies in India's potential as a semiconductor manufacturing destination. The presence of major players like Micron, Tata, and Foxconn, coupled with the supportive policies of the Indian government, creates a conducive environment for further growth and innovation in the sector. The Micron Technology semiconductor plant in Sanand, approved in June 2023, is expected to be among the first to begin production, with the first chip anticipated to roll out this year. However, there have been some delays with the initial phase of the project. Micron is already actively seeking partners to develop the second phase of the plant, indicating its long-term commitment to the Indian market. The majority of the memory and storage products manufactured at this assembly will be geared towards exports, reflecting India's ambition to become a global hub for semiconductor manufacturing. The facility represents a significant investment of $2.75 billion, with Micron committing $825 million and the remaining portion covered by central and state government subsidies. This level of financial support underscores the government's commitment to attracting foreign investment and fostering the growth of the semiconductor industry. The Tata Electronics and Taiwan's Powerchip Semiconductor Manufacturing Corp (PSMC) facility in Dholera, Gujarat, is another major project that promises to significantly enhance India's semiconductor manufacturing capabilities. This plant will focus on producing high-performance 28nm compute chips, as well as power management chips for electric vehicles, telecommunications, defense, automotive, consumer electronics, display, and power electronics. The project was approved in February last year, with a substantial investment of Rs 91,500 crore. The Tata-PSMC facility is projected to have a monthly production capacity of 50,000 wafers, further bolstering India's ability to meet the growing demand for semiconductors. In February 2024, Tata Semiconductor Assembly and Test received approval to establish an assembly, testing, marking, and packaging (ATMP) unit in Morigaon, Assam, with an investment of Rs 27,000 crore. This facility will utilize indigenous semiconductor packaging technologies and is expected to have a daily output capacity of 48 million chips. The chips produced at this facility will cater to a wide range of applications, including automotive, electric vehicles, consumer electronics, telecommunications, and mobile phones. Tesla is identified as one of the likely clients for this facility, highlighting the potential for India to become a major supplier of semiconductors to the electric vehicle industry. CG Power and Industrial Solutions, in collaboration with Japan's Renesas Electronics Corporation and Thailand's Stars Microelectronic, is also setting up an ATMP unit in Sanand, Gujarat, with an investment of Rs 7,600 crore. This facility is projected to have a production capacity of over 15 million units per day, with chips destined for consumer, industrial, automotive, and power applications. Kaynes Technology India's proposal to establish an outsourced semiconductor assembly and test (OSAT) facility in Sanand, Gujarat, was approved in September 2024. The facility is being built with an investment of Rs 3,300 crore. Malaysian ISO Technology and Taiwan's Aptos Technology will provide imported wafers to Kaynes, which will handle assembly, testing, and packaging. The OSAT unit is expected to have a production capacity of 6.33 million chips per day, translating to approximately 200 million chips per year. The company aims to scale up production to one billion chips per annum within five years. The diverse range of semiconductor facilities being established in India, encompassing manufacturing, assembly, testing, and packaging, demonstrates a comprehensive approach to building a complete semiconductor ecosystem. The strategic partnerships between domestic and international companies, coupled with the government's strong commitment to supporting the industry, position India to become a significant player in the global semiconductor market. The India Semiconductor Mission is not only aimed at reducing import dependence but also at creating high-skilled jobs, fostering innovation, and attracting further investment in the sector. As these facilities come online in the coming years, they are expected to have a transformative impact on India's economy and its technological capabilities.
Source: HCL-Foxconn chip plant approved: A look at six semiconductor facilities across India