Tata Semiconductor Initiatives in India
India is a big market for semiconductor chip, till date all chips are imported from Taiwan, US, Korea , Japan in India to meet the needs. This Year in February Tata Semiconductor has started the foundation of semiconductor initiative in India. Establishing a semiconductor fab is high capital & high risk business. Along with that various other resources are needed to setup a semiconductor manufacturing plant.
Since last couple of years Indian government has been quite vocal about the starting semiconductor manufacturing in India to minimize the dependency of nation on other countries for semiconductor chips. In 2021 government gave this mission a name & drafted few policies under “India Semiconductor Mission (ISM)”. Gujarat government didn’t waste any time in grabbing this opportunity from both hands, they developed some foreign companies friendly policies, subsidized the land buying cost to attract pool of companies who can invest in Gujarat.
India’s Semiconductor Initiative:
Tata is now building semiconductor fab in the “Dholera” of Gujarat. Estimation to complete this manufacturing is by 2026. Around 91000 crore investment is done in the first phase. This AI powered fab is supposed to fabricate 50,000 wafers per month. Tata semiconductor is manufacturing this fab in collaboration with PSMC (Powerchip Semiconductor Manufacturing Corporation). Tata also have planned to build 2 more fabs in the Dholera itself. The production capabilities of the other 2 fabs are expected to be same as the first fab. However its uncertain that the other 2 chips will also be in collaboration with PSMC or not.
Recently on 10th October 2024 Tata have signed a MoU with US tech giant Analog Devices. As per the MoU TATA Semiconductor will explore the opportunities to fabricate Analog device’s products in the dholera based fab. Also TATA may use the Analog Devices’s products to cater their EV vehicle manufacturing needs.
In the “Sanand” of Gujarat Micron technology is also setting up a Assembly & Testing industry. Reportedly they are investing around 2.75 billion $ to setup this packaging plant in the Sanand. On the similar line Tata Electronics is also expected to invest around $3 billion in Jagiroad, Assam for Assembling & testing of chips.
Tata is now eyeing some big customers whom this fabricated chip can be sold. Internally itself TATA can use these chips to meet the demand of their 2 major firms: TATA Motors & TATA Teleservices.
Why TATA Semiconductor chose Gujarat?
India’s very first semiconductor initiative is getting driven from Gujarat but what makes Gujarat so preferable for semiconductor business? First of all its no brainer that for any state to attract companies who can invest there, policies of business should be inclined towards companies. Gujarat offered the significant subsidy not only in the land purchase but also aid in capital expenditure. Gujarat is already a well developed state, it offers all those resources which a semiconductor company needs to start their fab business.
From availability of water, energy supply to land Gujarat offers everything which a business need initially. This is the reason why Gujrat has been the preferred choice for India’s semiconductor enablement mission. This drive will also help in generating good number of job opportunities in Gujrat.
Every other big country in world is eyeing to have semiconductor manufacturing setup in their nation, no one wants to be dependent only on US & Taiwan. Also demand of semiconductor chips are also surging due to their requirement in various applications. Augmented Reality, computer vision, Data centers, High speed data links, space , automotive, health care, commercial & industrial appliances every where semiconductor chips are in use.
The way Tata semiconductor is driving India’s semiconductor mission on the similar line Rapidus a Japanese foundry is also trying to enlighten Japan’s semiconductor hopes. Rapidus is also a work in progress foundry however they are eyeing 2nm chip development by 2027. In case if you want to know more about Rapidus you can read this post:
Rapidus 2nm Chip Production: A Threat for TSMC?
So, this has been the story of India’s semiconductor mission so far. We will have to wait for atleast couple of years to know where it is heading. But it’s a great initiative from India, semiconductor chip demand is only expected to scale up in coming years due to the high usage of chips in commercial as well as in automotive applications. These fabs will help in catering global demand of chips also India as a country will not have to be dependent on other countries for their chips requirements. Make in India mission will get more & more boost from such initiatives.
