India Semiconductor Mission and Tata Ink Fiscal Support Agreement for First Semiconductor Fab

Dholera: In a landmark move to bolster India’s semiconductor industry, the India Semiconductor Mission (ISM), Tata Electronics Private Limited (TEPL), and Tata Semiconductor Manufacturing Private Limited (TSMPL) have signed a Fiscal Support Agreement (FSA) to establish the country’s first commercial semiconductor fabrication plant in Dholera, Gujarat.

The agreement, signed in the presence of Gujarat Chief Minister Bhupendra Patel, marks a major step in India’s ambition to transition from a technology consumer to a global manufacturing leader.

Rs 91,000 Crore Investment with 50 per cent Government Support

The Tata Electronics semiconductor fab at Dholera Special Investment Region (SIR) will be developed with an investment of over Rs 91,000 crore and will have a production capacity of 50,000 wafer starts per month (WSPM).

The Government of India, through ISM, has pledged to provide 50 per cent fiscal support for eligible project costs on a pari-passu basis. This substantial financial commitment underscores India’s dedication to building a world-class semiconductor ecosystem within its borders.

Strengthening India’s Semiconductor Ecosystem

The project is expected to create over 20,000 direct and indirect skilled jobs and will be instrumental in addressing the growing global demand for semiconductors across key industries such as automotive, computing, communications, and artificial intelligence.

The collaboration also brings Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) into the fold, fostering a strong technological alliance to enhance India’s semiconductor capabilities.

Sushil Pal, CEO of the India Semiconductor Mission, reaffirmed the government’s commitment to ensuring the timely disbursement of fiscal support.

He stated, “This initiative underscores India’s ambitions in indigenous semiconductor manufacturing. We are confident that Tata Electronics will play a pivotal role in strengthening the electronics value chain and significantly contribute to India’s overarching goals in this sector.”

A New Era for Indian Semiconductor Manufacturing

Dr Randhir Thakur, CEO and MD of Tata Electronics, highlighted the significance of the agreement, calling it a “historic milestone” for both Tata Electronics and India.

“The Fiscal Support Agreement (FSA) solidifies our partnership with MeitY and ISM to realize our Hon’ble Prime Minister’s vision of manufacturing ‘Chips for Viksit Bharat’,” he said.

“With construction being undertaken with a great sense of urgency, Tata Electronics is deeply committed to building India’s first AI-enabled fab in Dholera.”

Transforming India into a Semiconductor Powerhouse

This initiative is expected to drive technological advancements, create employment opportunities, and contribute significantly to India’s economic growth.

By accelerating semiconductor manufacturing, India aims to position itself as a reliable player in global semiconductor supply chains. The strategic fiscal support from the government will be a catalyst in expanding the country’s semiconductor industry, marking a new chapter in India’s journey toward technological self-reliance and global competitiveness.

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