Telecom Minister Ashwini Vaishnaw has unveiled plans for a swift and decisive leap forward. Following the recent green light from the Union Cabinet, Minister Vaishnaw has confirmed that the construction of all three units is set to commence in the upcoming 100 days. This announcement not only signifies the government’s commitment to expeditious progress but also heralds a new phase of infrastructural advancement within the telecommunications domain.
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In a landmark decision, the Union Cabinet has given its nod to three pivotal chip-related projects, collectively valued at approximately Rs 1.26 lakh crore ($15.2 billion). One of these transformative initiatives is set to establish India’s inaugural semiconductor fabrication plant, a collaboration between the venerable Tata Group and a Taiwanese technology partner.
This groundbreaking project, anticipated to cost Rs 91,000 crore ($10.9 billion), will materialize in Gujarat’s Dholera, with Tata joining forces with Powerchip (PSMC) from Taiwan. The state-of-the-art facility is projected to have a remarkable annual chip production capacity of 300 crore, catering to diverse sectors such as high-performance computing, electric vehicles, defence, and consumer electronics. Minister of Information Technology, Ashwini Vaishnaw, has declared that the construction of this cutting-edge facility will commence within the next 100 days.
This preface sets the stage for an in-depth exploration of the approved chip-related projects, highlighting their significance for India’s technological landscape and economic trajectory.
The recent approval of three significant chip-related projects by the Union Cabinet marks a pivotal moment for India’s ambitions in semiconductor manufacturing, signifying a substantial stride forward after decades of unsuccessful endeavors. Beyond its potential to enhance domestic employment opportunities, this approval holds the promise of positioning India strategically in the global chip landscape, providing the nation with newfound influence in the technology geopolitics predominantly dominated by China and the United States.
This preface sets the context for a comprehensive exploration of the approved projects, shedding light on their potential implications for India’s technological self-reliance and geopolitical standing in the realm of advanced semiconductor manufacturing.
Against the backdrop of the government’s forward-looking initiatives, a significant stride was made in December 2021 with the introduction of a 76,000-crore chip incentive scheme. Under this program, the Centre pledged to subsidize half of the capital expenditure costs for semiconductor plants. Notably, the recent approvals by the Union Cabinet, as announced on Thursday, indicate a continuation of this transformative scheme, with all cleared proposals set to benefit from a substantial 50 percent subsidy on their capital expenditure costs courtesy of the Centre.
This preface sets the stage for a detailed exploration of the government’s incentive scheme and its ongoing impact on catalyzing advancements in semiconductor manufacturing within the country.
In a strategic expansion of its foray into the semiconductor domain, the Tata Group has unveiled plans to establish a chip assembly plant in Assam, a venture valued at Rs 27,000 crore ($3.25 billion). This move is geared towards meeting the demands of the burgeoning automobile market. Notably, the facility is anticipated to boast a remarkable daily manufacturing capacity of 48 million chips. Concurrently, the Union Cabinet has also greenlit a proposal by CG Power to establish a chip testing facility in Gujarat’s Sanand. In collaboration with Japan’s Renesas Electronics, this facility is set to be a significant investment of Rs 7,600 crore ($916 million).
This preface lays the foundation for a comprehensive exploration of these two dynamic proposals, unraveling the potential impact on the semiconductor landscape and their strategic significance for both the Tata Group and CG Power.