India Makes a Historic Leap Exclusive: Foundation Laid for First Commercial Semiconductor Fab

Prime Minister Narendra Modi virtually laid the foundation stone for three major semiconductor manufacturing projects in India on 13 March 2024. This marks a significant milestone in India's journey towards self-reliance in chip production. One of the three projects is for a commercial semiconductor fabrication facility (fab). This will be the first of its kind in India. Tata Electronics is setting up the fab in partnership with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC). The project's estimated cost is Rs 91,000 crore (approximately $11.3 billion).

India relies heavily on imports for its semiconductor needs

India relies heavily on imports for its semiconductor needs. This new fab will help reduce this dependence and boost domestic chip production. The semiconductor manufacturing project is expected to create around 50,000 jobs and attract further investment in the electronics sector. Locally produced chips will be crucial for various industries in India, including smartphones, consumer electronics, automobiles, and defence.

Dr Ajai Chowdhry, Founder & Chairman of EPIC Foundation and founder of HCL, said, "Today, India has accomplished a significant milestone that solidifies its position as a prominent participant in the worldwide semiconductor sector. It has been forty years since our initial conception of this goal; however, it remains an unrealized expectation owing to the previous administration's failure to acknowledge the potential of the semiconductor industry. Consequently, investment and strategic planning in this sector were delayed. Today, we are honoured to be guided by the visionary leader Narendra Modi, who personifies progressive thinking. His steadfast endorsement in closing the vulnerabilities instils confidence that we are in capable hands and that India is rapidly approaching the point where it can begin commercial production of semiconductor products and compete globally."

The fab is expected to be operational by the end of 2026

The Indian government has made many initiatives to stimulate indigenous semiconductor manufacturing, including the "Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India." This development is part of a more significant trend of countries like the US, China, and the EU aiming to reduce their reliance on foreign chip suppliers. It is a critical step towards India's emergence as a major player in the global semiconductor sector.