India is aspiring to be one of the front-runners in the race for the Semiconductor supremacy. The government's incentive schemes have encouraged manufacturers of electronics and semiconductors to invest close to Rs 3 trillion in the next five years. Key players in the semiconductor space, big and small, are setting up shop to make everything from smartphones and laptops to wearables. They are eyeing a huge market for electronics, estimated by the Confederation of Indian Industry, at $500 billion by 2030. Catalysed by the line up of the incentive schemes offered by the government ( PLI, SPECS ), it is encouraging to note the developments in this space. We look at the latest developments impacting India’s semiconductor ambitions.

The Biggies

The Rs 76,000-crore incentive package for semiconductors has already seen four major projects backed by Micron, the Tata Group and CG Power. The combined investments by these promoters could be around Rs 50,000 crore, given that the government will provide support to the extent of 50% of the cost and respective state governments too will chip in. The four units with a combined capacity of 80 million chips per day will have a presence across the value chain of design, fabrication and packaging.

• Micron Technology set the ball rolling with the first major announcement to commence construction of its semiconductor testing and assembly facility in Sanand,Gujarat during September 2023. This US chipmaker first announced its plans to establish the plant at a total proposed investment of US$2.75 billion. Of this, Micron has committed to US$825 million and the Indian government will provide the remaining in subsidies.
• Tata Electronics Private Limited (TEPL) will collaborate with Powerchip Semiconductor Manufacturing Corp (PSMC), Taiwan, to establish a semiconductor fab in Dholera, Gujarat, with an investment of INR 9100 million (US$3 billion).
• Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) will set up a semiconductor unit (ATMP) in Morigaon, Assam, with an investment of INR 2700 million (US$325.99 million).
• CG Power, in partnership with Renesas Electronics Corporation, Japan, and Stars Microelectronics, Thailand, will establish a semiconductor unit in Sanand, Gujarat, with an investment of INR 760 million (US$91.63 million).

Other Aspirers

• iPhone maker Foxconn has committed to an investment of $1.5 billion or about Rs 12,500 crore for its operations in the country.
• Vedanta Group chairman Anil Agarwal recently talked about plans to invest $20 billion or Rs 1.6 trillion in the next four years to produce, electronics, semiconductors and glass.
• Smaller contract manufacturers like Dixon Technologies, which makes a range of products from smartphones to television sets, are planning for a capex of about Rs 1,800 crore in the next three years. The company has a joint venture with Ericsson for inverter controller boards, for which it would be incurring some spends. This would take the overall capex of the company for FY25 to about Rs 570 crore.
• Kaynes has lined up close to Rs 4,000 crore for its semiconductor assembly projects. The company has started building the factory in Telangana ahead of the government’s nod. Again, AMD and Applied Materials have announced investments of Rs 3,300 crore each to finance R&D as well as to develop and commercialise technologies for semiconductor manufacturing equipment.
• Sudhir Goyal, CFO at Amber Enterprises, which makes consumer durable products, has indicated the company is looking to incur a capex of Rs 350-375 crore in FY25. The company plans to make PCBs (printed circuit boards) and is awaiting the incentive scheme for components.
• Gorilla glass maker Corning and Optiemus Infracom have teamed up for a new cover-glass finishing facility in Tamil Nadu. The joint venture is expected to invest close to Rs 1,000 crore in the facility.
• Karnataka-based semiconductor firm, Saankhya Labs, a subsidiary of Tejas Network, is a wireless communication and semiconductor solutions company specializing in designing products and solutions tailored for broadband, satellite, and broadcast applications, covering areas such as 5G NR, Direct to Mobile (D2M) Broadcast, rural broadband connectivity, satellite communication modems for IoT applications, and multi-standard DTV modulators and demodulators.
• Another player from Karnataka, Sensesemi develops the Systems on Chip (SoC) for Internet of Medical Things (IoMT) and IoT devices. The goal is to advance India’s semiconductor capabilities by delivering connected SoC solutions for applications like smart wearables, the medical technology sector, and other connected devices.
• While the total investment outlay from the above two firms are not clear, they are the latest beneficiaries approved under the Design-Linked Incentive (DLI) Scheme of the Government of India moving up in the value chain.

All the above news points to significant interest in this space overall, with many key players contending to make their mark in this emerging sector. With these planned investments rolling out in the coming years, it is poised to provide a boost to the overall ecosystem of the Electronics and Semiconductor manufacturing industries paving way for the emergence of several allied industries and supply chain ecosystem.