With the government’s Rs 76,000-crore incentive program for the industry, the Tata Group is poised to become the first domestic company to establish a chip plant in the nation with the approval of its Rs 25,000-crore semiconductor packaging plant in Assam. If approved, the assembly, testing, marking, and packaging (ATMP) project by Micron, which is valued at $2.75 billion, will be followed by this major semiconductor project.
Final Review Underway for Tata Group’s Semiconductor Facility Proposal
Rajeev Chandrasekhar, the state minister of electronics and information technology, stated on Thursday that the Group’s approval is currently undergoing final review before being forwarded to the Cabinet for final approval.
The Group, operating under Tata Electronics, had applied to establish an Outsourced Semiconductor Assembly and Test (OSAT) facility in Assam back in December.
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Tata Electronics Ventures into Semiconductor Packaging, Partners with Technology Firm
Tata Electronics will be producing and packaging chips for third parties and partnering with a semiconductor technology partner, in contrast to Micron, which is in the business of making and packaging its own chips. Essentially, the project’s objective is to procure wafers, or chips in their raw form, from manufacturers throughout the world, process and package them, and then ship them all over the world to industries that use semiconductors in their products.
According to the procedure, only businesses whose applications are accepted by the government are eligible to receive a 50% government subsidy on the cost of the project. The state governments in which the projects are located are at liberty to supplement this with any desired level of subsidy.
The group is also looking to finalize the construction of a semiconductor fabrication unit in Dholera, Gujarat, with commissioning anticipated to start early this year, according to comments made by N Chandrasekaran, Chairman of Tata Sons, in January.
Tata Group Leads Domestic iPhone Manufacturing; Semiconductor Projects Await Government Approval
The Tata Group became the first domestic company to manufacture iPhones when it purchased the Karnataka plant of Taiwan-based iPhone contract manufacturer Wistron Corp. in October of last year.
As previously reported, the government is anticipated to approve a number of semiconductor assembly and packaging projects prior to the announcement of the dates for the parliamentary elections.
A government-appointed committee is currently in the process of evaluating four proposals for the establishment of semiconductor fabrication units and thirteen proposals for the establishment of compound semiconductor fabs and assembly, testing, marking, and packaging (ATMP) units by companies like Hiranandani Group, CG Power, Kaynes Technology, and Foxconn-HCL JV, among others. Companies submit their projects to the India Semiconductor Mission (ISM), which reviews them and makes recommendations that determine whether to approve or reject them.
The government is projected to spend approximately five times more on semiconductor incentives in FY25 (~6,900 crore) than in FY24 (~1,500 crore).
The government plans to spend `4,200 crore of the 6,900 crore on ATMP/OSAT projects, `1,500 crore on fabrication units, `900 crore on modernizing the Semi-Conductor Laboratory (SCL), and `300 crore on a design-linked incentive and display scheme, according to the FY25 budgetary estimates.
