Government set to clear next set of chip proposals under Semicon Mission

The government is in the final stages of approving the next cohort of proposals for semiconductor projects which have been pending under the first phase of the India Semiconductor Mission.

These include applications from an HCL Group-Foxconn joint venture, the Hiranandani group's Tarq Semiconductors and two-three others, government officials told ET.

A senior official said out of the Rs 76,000 crore initial outlay of the first phase of the India Semiconductor Mission, about Rs 4,600-4,700 crore is remaining, which will be utilised towards these four-five proposals.


"The proposals are close to getting approved and are just awaiting final procedural approvals. Once the funds under the ISM 1.0 are exhausted, ISM 2.0 will be launched for which fresh proposals will be invited," the official said.

The HCL Group and Tarq Semiconductors did not reply to ET’s queries till press time Wednesday.

The JV between HCL and Taiwan’s Foxconn has secured a 30-acre land in Noida, Uttar Pradesh, intending to setup an outsourced assembly and testing (OSAT) unit, ET had reported last September. Foxconn is expected to invest around $37.2 million in the venture for 40% stake.

Hiranandani’s Tarq has committed to invest Rs 28,440 crore and secured 125 acres in Noida to produce compound semiconductors, silicon photonics devices, integrated circuits and optoelectronic components.

The Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India was notified in December 2021 with a total outlay of Rs 76,000 crore. The scheme provides 50% capital subsidy to companies setting up chip units in the country along with other incentives.

Also Read: Five approved semiconductor units across India and projects in pipeline

Out of the Rs 76,000 crore, Rs 10,000 crore had been earmarked for the modernisation of government-owned fab facility SCL in Mohali and Rs 1,000 crore for design-linked incentives scheme. The remaining funds of around Rs 60,400 crore would be utilised for incentives for the already approved proposals.

The government has so far cleared five semicon proposals, out of which four are for chip assembly and one is for chip fabrication by the Tata Group. The four assembly plants are expected to bring in an investment of almost Rs 1.5 lakh crore and produce 70 million chips per day cumulatively.

Micron Technology's ATMP unit in Sanand, Gujarat, is expected to produce its first chip in 2025. Tata Semiconductor Assembly & Test Pvt Ltd in Assam, with an investment of Rs 27,000 crore, is set to manufacture 48 million units per day, catering to automotive, telecom, and consumer electronics sectors.

Tata Electronics, in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation, plans to build India’s first AI-enabled semiconductor fabrication unit in Dholera, Gujarat, with a capacity of 50,000 wafers per month at an investment of Rs 91,000 crore.

CG Power, in collaboration with Renesas Electronics and Stars Microelectronics, is establishing an ATMP unit in Gujarat with a Rs 7,600 crore investment, focusing on specialized chips.

In addition, Kaynes Technology is setting up an ATMP unit in Gujarat with an investment of Rs 3,307 crore, aiming to produce 6.3 million chips per day.

Beyond the approved projects, several large-scale semiconductor initiatives are in the pipeline.

Suchi Semicon has started production in its Gujarat OSAT facility and has committed an investment of $100 million over three years.

Meanwhile, the Adani Group and Israel’s Tower Semiconductor are working on a proposed $10 billion semiconductor manufacturing plant in Maharashtra.

Also Read: India’s Semicon Mission likely to get a fiscal helpline for 8 years