Tata electronics’ ₹91,000 crore fab project to boost India's semiconductor self-reliance

The facility, set to be established in Dholera, Gujarat, marks a pivotal moment in the growth of the India semiconductor industry and reinforces the nation's ambitions of becoming a global leader in semiconductor manufacturing.

India Semiconductor Mission (ISM), TEPL, and Tata Semiconductor Manufacturing Pvt. Ltd. have signed an FSA to set up India's first commercial semiconductor fabrication unit in Dholera, Gujarat. Signed in the presence of Gujarat CM Bhupendra Patel, this ₹91,000 crore project will produce 50,000 wafers per month. The Indian government, through ISM, will provide 50% fiscal support. This initiative strengthens India’s semiconductor ecosystem, reduces import dependency, and is expected to create over 20,000 direct and indirect skilled jobs.

A Game-Changer for India’s Semiconductor Industry

The Tata Electronics chip manufacturing plant will be India’s first commercial semiconductor fab project, positioning the country as a key player in the global semiconductor supply chain. With an estimated capacity of producing 50,000 wafers per month (WSPM), this project will significantly reduce India's dependence on foreign semiconductor imports, aligning with the government’s Made in India semiconductors initiative.

The initiative, backed by the India Semiconductor Mission (ISM), highlights the government’s commitment to building a resilient and competitive semiconductor manufacturing ecosystem. To support this endeavor, the Indian government has pledged 50% fiscal support on a pari-passu basis for eligible project costs, ensuring financial feasibility and sustained growth.

India has long relied on global suppliers for its semiconductor needs, making local manufacturing a strategic necessity. The Tata Electronics semiconductor fab project is expected to bridge this gap by fostering innovation, encouraging domestic production, and attracting global investments.

Sushil Pal, CEO of the India Semiconductor Mission, emphasized the government’s commitment to timely fiscal support, stating, “This initiative highlights India’s ambition in indigenous semiconductor manufacturing. We are confident that Tata Electronics will play a pivotal role in strengthening the electronics value chain.”

Dr. Randhir Thakur, CEO and MD of Tata Electronics, called it a “historic milestone” for India’s semiconductor industry. “The Fiscal Support Agreement solidifies our partnership with MeitY and ISM to realize our Hon’ble Prime Minister’s vision of ‘Chips for Viksit Bharat.’ Tata Electronics is committed to building India’s first AI-enabled fab in Dholera,” he added.

Beyond chip production, the project will serve as a catalyst for technological advancements, paving the way for India to become a hub for semiconductor research, design, and fabrication. It will also create new opportunities for local businesses and startups, further strengthening the India semiconductor industry.

Job Creation and Economic Impact

The establishment of this chip manufacturing plant is expected to generate over 20,000 direct and indirect skilled jobs, providing employment opportunities across engineering, R&D, and manufacturing sectors. Additionally, the project will stimulate ancillary industries, driving overall economic growth and positioning India as a semiconductor powerhouse.

With rising geopolitical tensions and increasing concerns over supply chain disruptions, nations worldwide are prioritizing semiconductor independence. India’s foray into large-scale semiconductor manufacturing through Tata Electronics aligns with global trends and positions the country as an alternative destination for chip production.

Looking ahead, Tata Electronics' initiative is expected to encourage further investments in the India semiconductor industry, fostering collaborations with international technology firms and ensuring long-term sustainability. This project represents a monumental step toward achieving India's vision of Made in India semiconductors, reducing reliance on imports, and securing a prominent position in the global semiconductor landscape.