BPR 2024: Construction Of India’s First State-Of-The-Art Semiconductor Fab Begins In Dholera, Gujarat

India’s semiconductor industry, the construction of the country’s first state-of-the-art semiconductor fabrication plant (fab) has officially begun in Dholera, Gujarat. This ambitious project, spearheaded by Tata Electronics in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC), is set to transform the region into a key hub for semiconductor production.

Key Details of the Project

• Location and Investment: The fab is being built in Dholera, an emerging industrial zone located along the Delhi-Mumbai Industrial Corridor. With an investment of Rs. 91,000 crore, the facility is slated to produce 50,000 wafers per month and will be operational by 2026.
• Technology and Capabilities: The plant will use advanced AI-enabled systems and next-generation factory automation tools. It will focus on manufacturing microchips for high-demand sectors, including automotive, artificial intelligence (AI), data storage, and wireless communications. The technology will support semiconductor fabrication for transistor sizes ranging from 110nm to 28nm, targeting mature nodes.
• Job Creation: The project is expected to generate over 20,000 skilled jobs in the region, contributing to the economic development of Gujarat.

Why Dholera, Gujarat?

Gujarat has become the epicenter for India’s semiconductor revolution, driven by several factors:

• Policy Support: Gujarat was the first state to introduce a Semiconductor Policy, providing financial incentives like a 40% capital expenditure subsidy to attract semiconductor businesses. The policy also offers significant land subsidies for fab projects, including a 75% subsidy for the first 200 acres of land and a 50% subsidy for additional land.
• Infrastructure: Dholera’s strategic location within the Dholera Special Investment Region (SIR), along with abundant land, power, and water resources, makes it an ideal choice for semiconductor manufacturing. The region also benefits from strong chemical industries, which supply essential materials for chip production.
• Energy and Water: Gujarat has a robust power infrastructure with 23,550 MW from conventional sources and 16,588 MW from renewable energy. The state offers a Rs 2 per unit power subsidy and exemptions from electricity duty for semiconductor projects. Furthermore, the government is investing in desalination plants to ensure a steady supply of ultrapure water required for chip fabrication.

Expansion Plans and Economic Impact

Tata Electronics’ semiconductor ecosystem doesn’t stop at Dholera. The company is also constructing a semiconductor assembly and testing facility in Jagiroad, Assam, with an investment of Rs. 27,000 crore. This facility will further enhance India’s capabilities in semiconductor manufacturing, creating more than 27,000 direct and indirect jobs.

The Dholera semiconductor fab is expected to have a far-reaching impact on the global semiconductor supply chain. As companies worldwide look to diversify sourcing, India’s growing semiconductor industry offers an attractive alternative to traditional manufacturing hubs. Domestic semiconductor demand alone is projected to reach $110 billion by 2030.

Dholera’s Strategic Advantages

• Proximity to Major Markets: Dholera’s location near key industrial cities like Ahmedabad, Surat, and Baroda enhances its connectivity and accessibility, making it an attractive destination for semiconductor companies.
• Global Comparisons: Dholera’s rise as a semiconductor hub is reminiscent of Taiwan’s Hsinchu Science Park, which became a key player in the global semiconductor industry. With state-of-the-art infrastructure, land availability, and an evolving workforce, Dholera aims to replicate Taiwan’s success.
• Future Infrastructure Projects: Dholera’s transformation is further supported by ongoing infrastructure projects, including the construction of a new airport, a 109 km expressway, and a semi-high-speed rail line. These developments will improve connectivity and drive economic growth in the region.

Gujarat’s Semiconductor Hub in Focus

In addition to Dholera, Gujarat’s semiconductor industry is expanding rapidly. Sanand, near Ahmedabad, is witnessing investments from global players like Micron Technology and Murugappa Group, which are setting up assembly and testing plants. This semiconductor frenzy is further fueled by the state’s proactive policies, robust infrastructure, and competitive advantages, making Gujarat the preferred location for semiconductor projects in India.

Looking Ahead

The construction of India’s first semiconductor fab marks a significant step in reducing the country’s dependence on foreign chip manufacturers. With substantial investments and a supportive policy framework, Gujarat is poised to become a global hub for semiconductor production.

The success of this project will not only boost India’s technological capabilities but also create thousands of jobs, strengthen the domestic manufacturing ecosystem, and position India as a key player in the global semiconductor supply chain.

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