Cabinet Approves 4 New Semiconductor Plants

Cabinet Approves 4 New Semiconductor Plants

Why in News? 

Recently the Union Cabinet approved four new semiconductor plants in different states under India Semiconductor Mission. This decision reflects the government’s push to strengthen technology manufacturing and reduce dependence on imports.

Key Highlights: Cabinet Approves 4 New Semiconductor Plants

• The Union Cabinet has approved four new semiconductor plants in different states in August 2025 under the India Semiconductor Mission (ISM). 
• The total investment for these projects is around ₹4,600 crore. This move is expected to create over 2,000 direct skilled jobs and many more indirect employment opportunities. 
• All four new semiconductor manufacturing units will be set up in three states of India.
• Out of the four approved projects, two will be located in Odisha, one in Punjab, and another in Andhra Pradesh. 
• The investment will be used for setting up state-of-the-art fabrication and packaging facilities. 

About Four New Semiconductor Plants:

• Silicon Carbide Semiconductor Fabrication Unit: The first project in Odisha will be developed in Bhubaneswar’s Info Valley by SiCSem Pvt Ltd in partnership with Clas-SiC Wafer Fab Ltd., UK. The unit will focus on Silicon Carbide (SiC) compound semiconductors, which are crucial for high-performance applications.

• • • Capacity: 60,000 wafers and 96 million packaged units annually.
    • Applications: Defence systems, renewable energy solutions, transportation technologies, and advanced consumer electronics.

• Advanced Packaging and Glass Substrate Facility: The second project in Odisha will be led by 3D Glass Solutions Inc.. It will develop a high-end packaging and embedded glass substrate manufacturing unit.

• • • Capacity: 69,600 glass panel substrates, 50 million assembled units, and 13,200 3DHI modules annually.
    • Applications: Computing devices, defence equipment, automotive electronics, and photonics systems.

• Expansion of Mohali Semiconductor Manufacturing Plant: In Punjab’s Mohali district, Continental Device India Ltd (CDIL) will expand its current semiconductor facility. The upgraded plant will manufacture a range of advanced components:

• • • Products: MOSFETs, IGBTs, Schottky bypass diodes, and transistors.
    • Technology: Both silicon and silicon carbide materials.
    • Capacity: 158.38 million units annually.
      These components will serve industries like automotive manufacturing, renewable energy, industrial electronics, and communication networks.

• System in Package Manufacturing Plant: In Andhra Pradesh, Advanced System in Package Technologies (ASIP), in collaboration with APACT Co., Ltd, South Korea, will set up a new manufacturing facility.

• • Capacity: 96 million units annually.
  • Applications: Mobile devices, set-top boxes, automotive electronics, and a wide range of consumer products.

Current Status of India’s Semiconductor Sector

• India is building a chip ecosystem step by step. The government initiated the India Semiconductor Mission in December 2021, allocating an outlay of ₹76,000 crore. The programme supports fabs, compound semiconductors, and ATMP units. The pipeline expanded in 2023, 2024, and 2025.
• The total number of ISM-supported projects across India has now reached 10 units, spread over six states. These projects together represent an estimated investment of about ₹1.60 lakh crore, a milestone for the sector.
• The Cabinet cleared three large projects on February 29, 2024. The plan included a 50,000 wafers per month fab in Dholera and two packaging and specialty lines in Gujarat and Assam. 
• The approved investment amounts to approximately ₹91,000 crore, aiming for a production target of 50,000 wafers per month.
• Tata Electronics is setting up a greenfield fab with PSMC in Dholera, Gujarat and also pursuing the modernization of SCL Mohali.
• Tata Semiconductor Assembly and Test is constructing an ATMP facility in Morigaon, Assam. The unit targets high daily output for power and logic devices. The government cleared Keynes Semicon for an OSAT plant in Sanand in September 2024. 
• Electronics production in India keeps rising as smartphones, autos, and energy systems scale. The new lines target these domestic pulls first before export growth. 
• The Semicon India Programme provides fiscal support to fabs and OSATs. Central approvals in 2024 bundled fast-track timelines and coordination with anchor clients.  
• NXP has pledged over $1 billion to enhance its research and development presence in India. The country is building a workforce of 85,000 chip professionals. 
• A recent report indicates that the semiconductor market in India was valued at $45 billion in 2023, with projections suggesting a rapid growth rate of 13 percent CAGR, expected to exceed $100 billion by 2030.

Also Read: India’s First ‘Quantum Valley’ Tech Park

India Semiconductor Mission: Objectives and Schemes

• • India launched the India Semiconductor Mission (ISM) in December 2021. The mission aims to transform India into a key global centre for semiconductor and display manufacturing. The focus is on establishing a strong and self-sufficient electronics ecosystem.
    • ISM held the SEMICON INDIA 2024 conference in September 2024. The event promoted global collaboration and design innovation.

• Objectives: The mission outlines a long-term strategy for developing semiconductor and display manufacturing capabilities in India.

• • • The mission helps secure supply chains for raw materials, chemicals, and equipment.
    • The program supports chip design firms with tools and foundry services for startups.
    • The mission fosters innovation and startup growth via design-linked incentives. It supported 24 startups by September 2024.

• Schemes: Four Schemes were introduced under this mission:

• Scheme for Setting up of Semiconductor Fabs: The government supports silicon CMOS wafer fabs under this scheme. Authorities provide fiscal support of up to 50 percent of project cost. Officials adopted a uniform 50 percent support across all technology nodes in 2022. This scheme targets high-volume logic and analog manufacturing in India. 

• Scheme for Setting up of Display Fabs: The government backs TFT-LCD and AMOLED display fabs through this scheme. Officials offer up to 50 percent of project cost as fiscal support. The policy aims to build panel capacity for mobiles, TVs, and automotive displays. It also complements the semiconductor fab push by sharing utilities and suppliers. 

• Scheme for Compound Semiconductors, Silicon Photonics, Sensors, and ATMP/OSAT: The government covers power devices, SiPh, MEMS/sensors, and discrete semiconductors here. The scheme also supports ATMP and OSAT units for assembly and test. Authorities provide 50 percent of capital expenditure on a pari-passu basis. Policymakers created this track to serve autos, energy, and communications demand. India uses this route to ramp SiC and GaN device lines with strategic value. 

• Design Linked Incentive (DLI) Scheme: The government supports fabless and systems design through the Design Linkage Initiative (DLI). This program finances design startups and offers access to EDA tools and Multi-Project Wafer (MPW) services. The policy supports stages from proof-of-concept to product launch. The scheme builds a pipeline that feeds future fabs and OSAT units. 

Why Semiconductor Development Matters for India?

• Growing Market Demands: India’s semiconductor market stood at about USD 52 billion by 2024. It has expanded from approximately USD 38 billion in 2023 and is anticipated to grow to between USD 100 and 110 billion by 2030. The country’s demand outpaces local production. This gap drives the need to build chip-making capacity at home. 

• Chips Power Sectors: Modern Indian industries such as automobiles, smartphones, and renewable energy systems rely heavily on chips. India’s automotive sector alone is a massive semiconductor market worth billions. The country needs domestic chip supply to support these growing applications.

• Boost Jobs and Investment: Chip manufacturing creates high-skilled jobs and attracts investment. In 2023–2024, India approved several chip and packaging plants that promise thousands of direct jobs. These investments also stimulate ancillary industries and services. The government increased its electronics manufacturing funding by over 70 percent in the 2024 budget. 

• Global Supply Security: Global chip shortages and geopolitical tensions show how fragile supply chains can be. India has more than 85 percent import dependence for chips. Building local semiconductor capacity strengthens national security. It reduces reliance on foreign suppliers and adds resilience to critical technologies. 

• R&D Growth: India’s partnerships with global semiconductor players reinforce its strategic value. The US, Japan, and EU collaborate with India on semiconductor supply chains and innovation through bilateral frameworks. These alliances enhance skills, technology transfer, and global visibility for India’s chip sector.

Also Read: Cabinet Approves Research Development and Innovation (RDI) Scheme