Chip Production Market to Grow Faster As India Reviews $21 Bn Proposals

Chip Production

Three points you will get to know in this article:

  • Tower Semiconductor Ltd. plans a $9 Bn plant, while Tata Group offers an $8 Bn chip fabrication unit.
  • Tower Semiconductor plans to scale up a plant to produce 80,000 silicon wafers monthly over a decade.
  • The Tata Group plans to build a $3 billion chip-packaging plant in eastern India.
chip manufacturing

With its extensive experience in creating high-quality, innovative technological and manufacturing solutions for the analog industry, Tower Semiconductor is the leading foundry for producing advanced analog integrated circuits, which offers competitive advantages in various growing markets. The Company’s strategic roadmap alignment and long-lasting relationships with its substantial clientele foster sustained growth and entry into the frontier market. Tower Semiconductor has been advancing and manufacturing the most advantageous analog semiconductor solutions for over three decades. Through its comprehensive understanding of existing and future market requirements, the Company delivers cutting-edge analog technologies and manufacturing solutions for various sectors, including automotive/consumer/medical (including defense), and industrial.

Major Investment Proposals for Chip Manufacturing

The Indian government is currently assessing investment proposals totaling a whopping $21 billion to give a significant push to chip manufacturing within the country. As reported by Bloomberg, these proposals encompass a wide array of ventures, coming from both domestic giants and international players alike.

Tower Semiconductor's $9 Billion Plant Proposal

Hailing from Israel, Tower Semiconductor Ltd. has put forward plans for a $9 billion plant. According to the report, both proposals, combining for a total investment of $17 billion, are earmarked for Gujarat.

Sources reveal that Tower Semiconductor’s strategy involves gradually expanding a plant over the course of a decade, aiming to churn out a staggering 80,000 silicon wafers monthly. Should it get the nod, this would signify a landmark move as it would be the first major semiconductor company to operate a fabrication unit in India.

Tata Group's $8 Billion Chip Fabrication Unit

India’s very own Tata Group has come up with an $8 billion chip fabrication unit. The collaboration between the esteemed Tata conglomerate and Taiwan’s Powerchip Semiconductor Manufacturing Corp. is eagerly awaited for their joint project, while discussions have also been underway with United Microelectronics Corporation.

As part of its strategic vision, the Tata group has already unveiled plans to commence the construction of a cutting-edge chip fabrication plant in Dholera later this year. Both Tower and Tata’s facilities are set to specialize in the production of mature chips, leveraging 40-nanometer or older technology, crucially employed in a myriad of consumer electronics, automobiles, defense systems, and aircraft.

In addition to this, the Tata Group is forging ahead with its ambitions to establish a state-of-the-art $3 billion chip-packaging plant in eastern India. This facility is slated to assemble and export chips, catering to various sectors including automakers like Tata Motors Ltd., a key entity under the group’s umbrella. However, it’s important to note that government approval is imperative for the smooth progress of this endeavor.

Government's Support and Budget Allocation

On the governmental front, the Semicon India programme has been granted the green light, with a substantial budget allocation of INR 76,000 Crore earmarked for bolstering the semiconductor and display manufacturing ecosystem within the nation.

In a recent statement, Rajeev Chandrasekhar, Minister of State for Electronics and IT, disclosed that the government has received four proposals for the establishment of semiconductor manufacturing plants, along with thirteen proposals for chip assembly units. Notably, these proposals complement the significant investment of INR 22,516 Cr made by Micron, a renowned US-based memory chip manufacturer, in setting up a chip assembly plant.

Growth and Projections for India's Semiconductor

Looking ahead, India’s semiconductor industry is poised for substantial growth, with projections indicating a market value of $55 billion by the year 2026. This promising trajectory is primarily driven by the escalating demand for smartphones, automobiles, and data storage solutions. Moreover, semiconductor chips are anticipated to play an increasingly integral role across diverse sectors of India’s economy, spanning aerospace, automotive, communication, IT, clean energy, defence, and beyond. Such expansion signals a significant leap forward in technological advancement and economic development for the nation.

The Indian government is evaluating investment proposals worth $21 billion to boost chip manufacturing, with Tower Semiconductor Ltd. proposing a $9 billion plant and Tata Group planning an $8 billion chip fabrication unit. These ventures are expected to be located in Gujarat and focus on producing mature chips for various industries. Additionally, the Tata Group aims to establish a $3 billion chip-packaging plant in eastern India. The Semicon India program has been approved, with a substantial budget allocated to strengthen the semiconductor and display manufacturing ecosystem. The semiconductor industry is set for significant growth, with projections indicating a market value of $55 billion by 2026, driven by increasing demand across various sectors.

SA Team

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