India approves $15 billion investment in landmark chip plant, including Tata Group’s participation
The Indian government has given the green light to investments totaling $15.2 billion in semiconductor fabrication plants, with plans for Tata Group to construct the nation’s inaugural large-scale chip manufacturing facility.
Prime Minister Narendra Modi’s government approved Tata’s plan to build an $11 billion facility capable of producing about 50,000 wafers a month, Technology Minister Ashwini Vaishnaw told reporters in New Delhi on Thursday. The board also approved Tata’s separate proposal for an over $3 billion chip assembly plant and a packaging venture between Japan’s Renesas Electronics Corp. and Murugappa Group’s CG Power and Industrial Solutions Ltd.
While the approvals are still only blueprints, they will advance India’s semiconductor ambitions. Like a growing number of countries around the world, the Modi administration wants to support and encourage the building of domestic chip-making capacity and ensure supplies of components needed for future technologies, from artificial intelligence to self-driving cars.
“We will start construction of this facility within 100 days,” the minister said at a press conference, referring to the Tata plant.
India hopes to attract chip giants in the same way incentives have encouraged Apple Inc and its partners to make and sell iPhones in the country, a further boost to its giant manufacturing sector. It is offered to cover half the cost of approved projects up to an initial maximum of $10 billion. The semiconductor fund has already helped US memory maker Micron Technology Inc set up a $2.75 billion assembly plant in Gujarat.
The Tata conglomerate is expected to partner with Taiwan’s Powerchip Semiconductor Manufacturing Corp. for the project, although it has also held talks with United Microelectronics Corp. The new production facility produces so-called mature chips – using 40 nanometer or older technology – that are widely used in consumer electronics, cars, defense systems and aircraft.
The $150 billion Tata Group has previously said it plans to start building a chip factory in Dholera this year. 50,000 wafers per month, the imagined Tata location is modest in size compared to similar facilities around the world.
The moves are part of Tata’s growing push to invest billions of dollars in high-tech companies. It operates India’s largest smartphone component factory built at a cost of over $700 million in South India. It also bought the Indian plant of Apple supplier Wistron Corp. last year and plans to build its own iPhone factory.
Semiconductors have grown into a key geopolitical battleground as the United States, Japan and China have invested heavily in developing domestic capabilities.
Modi’s drive to make India a global manufacturing hub also includes luring international chipmakers to the country – a bid to rely on less expensive imports and boost the growing smartphone assembly industry.
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