A joint venture between HCL and Foxconn has recently been approved by the Union Cabinet for the establishment of a chip assembly and packaging plant in one of Uttar Pradesh's towns. It has been estimated that for this plant setup cost would be Rs 3,706 crore, which would be one of the sixth such units in India which is a next step towards govenment's ambitious India Semiconductor Mission.
Reports and analyses by the government say that this mega semiconductor project will be designed in such a way that it will handle somewhere 20,000 semiconductor wafers and generate 36 million or 3.6 crore semiconductor units per month. Since India has already achieved success in setting up five semiconductor plants, which are at their final stages, and this will be the sixth one, taking India forward in the semiconductor industry strategically.
The official statement was released by the Information and Broadcasting Minister, who briefed the media about the cabinet's decision. He said, "The Cabinet has approved a sixth semiconductor plant that will be set up in Jewar, Uttar Pradesh. It is a joint venture between HCL and Foxconn to manufacture display driver chips. These chips control the quality and format of the content displayed on screen. It is a very advanced technology that is being set up," He also noted that how the demand for the semiconductors are increasing rapidly for laptop, mobile phone, server, medical device, power electronics, defence equipment, and consumer electronics manufacturing in India, The Bharat and this new project will add values to the Prime Minister's Abitious vision of Atmanirbhar Bharat.
HCL and Foxconn are currently the two major players in India, and this sixth plant will push India's local chip production. Foxconn has already tried a similar approach in 2022 along with Vedanta, but the joint venture fell apart in the latter part of 2023 because both couldn't find a feasible tech partner. The plant will be established at the Yamuna Expressway Industrial Development Authority near Jewar Airport and will be UP's first semiconductor manufacturing plant. Among the remaining five, one fabrication and three assembly units will be coming soon in Gujarat, and one assembly and packaging unit will be in Assam.
The Union IT Minister Ashwani Vaishnaw said that by the end of 2027, the plant setup will be completed and will start producing chips. Around 40% of India's local demand for the chips can be easily fulfilled by the plant, and Foxconn will use the rest. The government has attracted $18 billion of investment up to this point under the first phase of India's Semiconductor Mission, and it also includes the TATA-PSMC fab that costs roughly $11 billion, along with assembly and testing units.
Applied Materials and Lam Research are the two biggest equipment manufacturers in India. Merck, Linde, Air Liquide, Inox, and other gas and chemical suppliers are also ready to contribute to India's growth journey in the semiconductor industry.
This Joint venture will also contribute to employment by generating around 2000 jobs in India. The chief minister, Yogi Adityanath, has welcomed the approval of the Union Cabinet by saying this is a "Historic Step" towards the Atmanirbhar Bharat. As per the Information and Broadcasting Minister, Ashwani Vaishnaw, among all the other semiconductor manufacturing units currently underway, people can expect the inauguration of one of them later this year.
Significance of this Semiconductor plant
This plant has some major significance because design, fabrication, assembly, testing, marking, packaging, and supply require equipment, chemicals, and gases, and all require strengthening India's Semiconductor Ecosystem. Ashwini stated, "Five semiconductor units are currently in advanced phases of development. Bharat advances in its effort to grow the strategically important semiconductor sector with its sixth plant." He also talked about the remaining five semiconductors, which are being built in Assam and Gujarat.
The ministry stated by emphasizing India's Semiconductor Mission by quoting, "Semiconductor industry is now shaping up across the country. World class design facilities have come up in many states across the country. State governments are vigorously pursuing the design firms. Students and entrepreneurs in 270 academic institutions and 70 startups are working on world class latest design technologies for developing new products. 20 products developed by the students of these academic students have been taped out by SCL Mohali."
What is India's Semiconductor Mission?
ISM or India Semiconductor Mission is aiming to provide financial support to companies that are investing in semiconductors, display manufacturing, and the design ecosystem, contributing to the development of a sustainable semiconductor and display ecosystem. It was started in 2021, with a total budget or financial outlay of Rs 76,000 crore backed by the Ministry of Electronics and Information Technology.
ISM holds significance in organising efforts for promoting semiconductors and the display industry more structurally, focused, and comprehensively by formulating long term blueprints, facilitating trusted electronics, secure supply chains, and enabling multi fold growth, collaborations, and partnerships with international agencies.