On 29 February 2024 the Union Cabinet approved three more semiconductor units under the India Semiconductor Mission, with a combined investment of Rs 1.26 lakh crore (about $15.2 billion at the exchange rate of the time). They are India's first commercial wafer fab, a Tata Electronics plant at Dholera, Gujarat, built with Taiwan's PSMC, and two assembly and test plants: Tata's unit at Morigaon, Assam and CG Power's unit at Sanand, Gujarat. The government said all three would start construction within 100 days.
This post, written at the time of the announcement, sets out what was approved, why it matters for India's economy and supply chains, and what to watch as the projects are built.
Key takeaways
- Three units, Rs 1.26 lakh crore in total: a 50,000 wafer-starts-per-month fab (Rs 91,000 crore) and two ATMP units (Rs 27,000 crore and Rs 7,600 crore).
- The Dholera fab is India's first commercial front-end fab, targeting 28 nm logic and power management chips.
- The ATMP units add a combined announced capacity of 63 million chips per day.
- The government estimated about 20,000 direct advanced technology jobs and about 60,000 indirect jobs.
- They follow the Micron ATMP unit at Sanand approved in June 2023, under the Rs 76,000 crore programme notified in December 2021.
The three approved units at a glance
| Unit | Company and partner | Location | Investment | Announced capacity |
|---|---|---|---|---|
| Wafer fab | Tata Electronics (TEPL) with PSMC, Taiwan | Dholera, Gujarat | Rs 91,000 crore | 50,000 wafer starts per month |
| ATMP | Tata Semiconductor Assembly and Test (TSAT) | Morigaon, Assam | Rs 27,000 crore | 48 million chips per day |
| ATMP for specialised chips | CG Power with Renesas (Japan) and Stars Microelectronics (Thailand) | Sanand, Gujarat | Rs 7,600 crore | 15 million chips per day |
ATMP stands for assembly, testing, marking and packaging, the back-end steps that turn a finished wafer into packaged, tested chips. The industry also calls these OSAT (outsourced semiconductor assembly and test) plants.
Details of the approved establishments
Semiconductor fab with 50,000 wafer starts per month in Gujarat
- Location: Dholera, Gujarat.
- Investment: Rs 91,000 crore.
- Company and technology partner: Tata Electronics Private Limited (TEPL) will build and run the fab; Powerchip Semiconductor Manufacturing Corp (PSMC) of Taiwan is the technology partner. (Correction: the original listed TEPL as the technology partner; the government release names PSMC.)
- Capacity: 50,000 wafer starts per month (WSPM).
- Segments covered:
- High-performance compute chips with 28 nm technology.
- Power management chips for electric vehicles (EVs), telecom, defence, automotive, consumer electronics, display and power electronics. These are high-voltage, high-current applications.
- Significance: this fab aims to bolster India's semiconductor ecosystem and reduce import dependency.
Why 28 nm? It is a mature, long-lived node that is cost-effective for microcontrollers, display drivers, connectivity chips and many automotive and industrial parts. It is not a leading-edge node, but it covers a large share of the chips that Indian electronics, automotive and telecom makers actually buy.
Semiconductor ATMP unit for specialised chips in Gujarat
- Location: Sanand, Gujarat.
- Investment: Rs 7,600 crore.
- Technology partner: CG Power, in partnership with Renesas Electronics Corporation (Japan) and Stars Microelectronics (Thailand).
- Segments covered: chips for consumer, industrial, automotive and power applications.
- Capacity: 15 million units per day.
- Strategic importance: strengthening India's position in specialised chip production.
Semiconductor ATMP unit in Assam
- Location: Morigaon, Assam.
- Investment: Rs 27,000 crore.
- Technology: Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) is developing indigenous advanced semiconductor packaging technologies, including flip chip and ISIP (integrated system in package).
- Capacity: 48 million units per day.
- Segments covered: automotive, electric vehicles, consumer electronics, telecom and mobile phones.
- Objective: enhance domestic semiconductor assembly and testing capability.
All the above establishments were expected to start construction within the next 100 days of the February 2024 approval.
What a fab and an ATMP unit actually do
Chip making has two broad halves. The front end, done in a fab, builds transistors and wiring on silicon wafers through hundreds of steps of deposition, lithography, etching and doping. The back end, done in an ATMP or OSAT plant, tests the dies on the wafer, cuts them apart, mounts them in packages, connects them with wire bonds or flip-chip bumps, then tests and marks the finished parts.
A rough sense of scale, using illustrative numbers rather than plant figures: a 300 mm wafer can hold several hundred mid-sized dies, so 50,000 wafer starts a month can mean tens of millions of chips a month, depending on die size and yield. Back-end capacity is quoted in units per day because each package is handled separately.
Why this matters for India's economy
Establishing semiconductor fabrication units within India can significantly boost the country's economy.
Lower import bill and stronger trade balance
India relies heavily on imported semiconductors for its electronics industry. By producing chips domestically, India can reduce its import bill and strengthen its trade balance. With local production, India can also export semiconductors, contributing to foreign exchange earnings.
Supply chain resilience
A robust semiconductor industry ensures a stable supply chain for sectors such as consumer electronics, automotive and telecommunications. The chip shortages of 2020 to 2022, which halted car production lines around the world, showed how costly a single disrupted link can be. This resilience is crucial for economic growth.
Self-reliance and strategic autonomy
India's move toward self-reliance in semiconductor manufacturing aligns with the broader vision of Atmanirbhar Bharat (self-reliant India). Reducing dependence on foreign suppliers also enhances India's strategic autonomy, particularly for defence, telecom and power infrastructure.
Jobs across the value chain
Self-reliance creates job opportunities across the value chain, from research and development to manufacturing and distribution. The government estimated that these three units would create about 20,000 direct advanced technology jobs and about 60,000 indirect jobs. Semiconductor manufacturing is highly capital-intensive, but it also needs large numbers of skilled engineers and technicians. (Correction: the original called the industry labour-intensive; the capital cost per job is very high, and the demand is for skilled rather than bulk labour.)
Scientists, engineers and researchers will work on advanced process and packaging technology. A thriving semiconductor industry also has a multiplier effect on related sectors such as electronics manufacturing, start-ups and entrepreneurship, and chip design, where India already has a large workforce.
Challenges to watch
- Utilities: fabs need uninterrupted power and very large volumes of ultra-pure water.
- Talent: India has deep chip design capability, but fab and packaging operations need process, equipment and yield engineers that take years to develop.
- Supplier ecosystem: specialty gases, chemicals, substrates and equipment servicing must follow the fabs.
- Customers: a fab must win long-term orders against established foundries in Taiwan, China and elsewhere.
What happened next
This section adds later developments and is dated. In August 2025 CG Semi, the CG Power subsidiary, inaugurated a pilot line at its Sanand OSAT unit, which ministers described as the source of the first made-in-India chips for customer qualification, as reported by Indian business press at the time. Progress on the Dholera fab and the Assam unit should be checked against current India Semiconductor Mission updates.
FAQ
How much is Rs 1.26 lakh crore in dollars?
About $15.2 billion at the exchange rate in early 2024 (roughly 83 rupees to the dollar).
Is the Dholera fab India's first?
It was announced as India's first commercial front-end fab. India has had smaller government and research fabs, such as the Semi-Conductor Laboratory at Mohali, but not a high-volume commercial foundry.
What is the difference between ATMP and OSAT?
They describe the same back-end work. ATMP lists the steps (assembly, testing, marking and packaging); OSAT describes the business model of doing it as a service for chip companies.
Sources
- Giant leap for India Semiconductor Mission: Cabinet approves three more semiconductor units, Prime Minister's Office, 29 February 2024. https://www.pmindia.gov.in/en/news_updates/giant-leap-for-india-semiconductor-mission-cabinet-approves-three-more-semiconductor-units/
- Government approves 3 semiconductor units in India, Tata Group to set up two, Times of India. https://timesofindia.indiatimes.com/gadgets-news/government-approves-3-semiconductor-units-in-india-tata-group-to-set-up-two/articleshow/108109506.cms
- Cabinet Okays 3 Semiconductor Units, Construction To Start In 100 Days, NDTV. https://www.ndtv.com/india-news/union-cabinet-okays-3-semiconductor-units-construction-to-start-in-100-days-5149993
- Cabinet approves 3 semiconductor fab units, to generate 80,000 jobs, Business Insider India. https://www.businessinsider.in/business/news/cabinet-approves-3-semiconductor-fab-units-to-generate-80000-jobs/articleshow/108108678.cms
Excellent progress made by the Indian Government on the path to self reliance!
ReplyDeleteThis is great news for the world with plethora of options for the emerging product sectors and markets!
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