The fab game: Meity timeline for commercial chip production in the works

Micron's Sanand unit could be the first to bring out 'made-in-India' chips by Aug 15 next year

The Ministry of Electronics and Information Technology (Meity) is finalising a timeline for the commercial production of semiconductor wafers and chips from projects already approved by the government, as it intensifies its focus on execution, according to official sources.

The first project expected to begin production is Micron’s $2.7 billion chip testing and packaging plant, slated to roll out the first commercial “made-in-India” chips by mid-2025, potentially around August 15, according to a senior ministry official. Micron’s ATMP/OSAT (assembly, testing, marking, and packing/outsourced semiconductor assembly and testing) facility in Gujarat’s Sanand was the first semiconductor project cleared under the government’s Rs 76,000 crore semiconductor scheme, Semicon India, in January 2023. Initially, the company’s India facility was expected to produce chips by December 2024.

The Tata group (Tata Electronics), which has committed Rs 91,000 crore to set up India’s first semiconductor fabrication facility, cleared in February 2024, will take about three and a half years to begin wafer production at the Dholera facility in Gujarat, the official said.

Its ATMP plant in Assam’s Jagiroad -- a Rs 27,000 crore project -- is expected to start producing chips by the end of next year. Meanwhile, Kaynes Technology, a Mysuru-based firm, is looking at commencing commercial production by early FY26, after receiving the government’s approval for a testing and packaging plant.

CG Power, part of Murugappa Group, is also setting up a testing and packaging unit in Sanand with an investment of Rs 7,600 crore and has publicly stated that it aims to start production in two and a half to three years.

When contacted, a spokesperson for Tata Electronics said: “We are not making any comments.” While Micron did not respond to queries, a Kaynes Technology spokesperson confirmed the company expects the plant to become operational by early FY26.

The senior Meity official also elaborated on plans for a second edition of the semiconductor scheme, as the Rs 76,000 crore earmarked for incentives is nearly exhausted following clearances to the already announced projects. Under the current scheme, fab plants and OSAT/ATMP projects receive an incentive covering 50 per cent of the cost of setting up the plant.

“Discussions are ongoing with stakeholders, and drafts have been made. Finalisation of the 2.0 semiconductor scheme will take around six months,” the official said. He added that the primary focus remains on executing the existing projects and incentivising efforts to build a semiconductor supply chain ecosystem, crucial for the success of India’s semiconductor mission. “We haven’t frozen the modalities or the size of the new proposed scheme yet,” he noted, also mentioning that reviving SCL (Semi-Conductor Laboratory) in Chandigarh is another priority.

According to the participants of a stakeholder meeting with the government, the industry has urged the government to incentivise companies to set up supply chains within India for semiconductor manufacturing. “We have requested the government to provide incentives for companies involved in materials, machines, equipment, and spare parts manufacturing critical for the semiconductor industry. The government has been positive to this,” said a CEO of one of the companies with a government-approved project.

There have been discussions about reducing the 50 per cent incentive for OSAT/ATMP projects in the future to 20-25 per cent, given the sector’s momentum with four projects underway. One significant project — a joint venture between Foxconn and the HCL Group — remains pending with the India Semiconductor Mission.

Another major project awaiting clearance, after approval by the Maharashtra government, is a collaboration between the Adani group and Israeli fab company Tower Semiconductor. The two have committed Rs 83,947 crore to the initiative. Should all these projects materialise, total investment shall be over $30 billion (around Rs 2.5 trillion) in the semiconductor sector in India.