India will become a semiconductor hub in near future: PM Modi

The day is not far when India will become a global power in the manufacture of products for the semiconductor sector, Prime Minister Narendra Modi said on Wednesday as he laid the foundation stone for three major semiconductor projects and blamed previous governments for indulging in corruption worth thousands of crores and not investing in modern technology.

The PM was addressing via video conferencing a gathering at “India’s Techade: Chips for Viksit Bharat” in Dholera, where he laid the foundation stone for three semiconductor projects – two in Gujarat and one in Assam – valued at approximately ₹1.25 lakh crore.

“India has left behind old thoughts and old approach and has moved much ahead. India is taking speedy decisions and making policies. We have lost decades in semiconductor manufacturing. But we should not lose a single moment now,” he said in his 25-minute address.

Acknowledging the critical role of electronic chips in the tech landscape of the 21st-century, Modi said that “Made in India” and “Designed in India” chips will play a major role in taking India towards self-reliance and modernisation.

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“In the 60s, India had dreamed of semiconductor manufacturing and thought in this direction. But the governments then could not take advantage of the opportunities that were before us. The biggest reason for this was lack of will, lack of efforts to convert thoughts into action and the lack to take bold decisions for the country. Due to this, for many years, India’s dream of making semiconductors remained a dream,” he added.

The developments are in line with the government’s recent push to make the country a hub for manufacturing and assembling semiconductors, a key ingredient in a wide swathe of technology sectors but one whose supply was disrupted first by the pandemic and then geopolitical tensions between the US and China.

Modi’s events came weeks after the Cabinet approved three proposals to set up semiconductor units in India; these facilities, together, will create high performance compute chips to be used in electric vehicles, high power compute, telecom, defence, automobiles, consumer electronics, power electronics and display, in addition to helping in assembly, testing, marking, and packaging of semiconductors.

Modi said that those in power earlier were complacent and he criticised previous governments for considering semiconductor technology a requirement for the future and neglecting investments, citing the misconception that India, being a poor country, couldn’t manage high-tech sectors.

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“They could not balance the country’s priorities. They thought that India is a poor country and how will it manage high tech areas like semiconductors. In the guise of the country’s poverty, they ignored investments in such modern technology. They could do scams worth thousands of crores of rupees but could not invest similar amount in semiconductor sector. With such thoughts, no country can progress,” he said.

He emphasised that such thinking hinders a country’s progress and contrasted it with his government’s forward-looking approach, stressing the importance of advancing in the semiconductor sector to compete with developed nations while simultaneously addressing other major needs of the country, such as providing ‘pucca’ housing for the poor, investing in research, executing large-scale sanitation drives, and developing modern infrastructure.

“On one hand we are running the world’s largest sanitation drive and on the other hand, we are racing ahead in semiconductor manufacturing. We are eradicating poverty rapidly and on the other hand we are building modern infrastructure. We are making India Aatmanirbhar [self-reliant]. In 2024, we have laid foundation stones and inaugurated schemes worth over ₹12 lakh crore,” he said.

The semiconductor fabrication facility at the Dholera, about 120km from Ahmedabad, will be set up by Tata Electronics Private Limited (TEPL) for semiconductor fabrication in India. With a total investment of over ₹91,000 crore, this will be the first commercial semiconductor fab in the country. The facility, developed in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC), will have a capacity to manufacture up to 50,000 wafers per month.

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The Outsourced Semiconductor Assembly and Test (OSAT) facility in Morigaon, Assam will also be set up by TEPL under the Modified Scheme for Semiconductor Assembly, Testing, Marking and Packaging (ATMP), and with total investment of about ₹27,000 crore. Another OSAT facility in Sanand, will be set up by CG Power and Industrial Solutions Limited under the ATMP with total investment of about ₹7,500 crore.

These initiatives are expected to generate substantial employment opportunities.

“In the first, second, and third industrial revolutions, India lagged behind due to various reasons, but in the fourth industrial revolution, India is moving forward with great self-confidence, determined not to lose a single moment,” Modi said. “With the semiconductor mission initiated two years ago, today marks the unveiling of three projects. India commits, India delivers and hence democracy delivers.”

He further stated that the Covid-19 pandemic emphasised the need for a reliable and resilient supply chain, and India was prepared to play a significant role in this regard. “The country has already shown its prowess in space, nuclear technology, and digital power. India is now stepping into semiconductor commercial production, poised to become a global player in this field. The decisions and policies made today will strategically strengthen the country for the future,” he said.

Gujarat Congress spokesperson Manish Doshi welcomed the Centre’s initiatives for the semiconductor sector, but criticised the Prime Minister for allegedly appropriating credit. “The priority for the country post-Independence was different. Without producing engineers how do you expect to make semiconductor chips? One must remember that it was Prime Minister Jawaharlal Nehru who built world class institutions including the Indian Institutes of Technology (IITs),” he said.