Govt forms committee for modernisation of Mohali semiconductor plant

The IT ministry aims to make SCL into a research and development-led Center of Excellence with semiconductor R&D capabilities

The ministry of electronics and information technology has formed a committee to assess the bidders for the modernisation of the Semiconductor Lab (SCL) in Mohali, The Economic Times (ET) reported on Monday, citing a senior official. The ministry issued an expression of interest (EoI) seeking technology players to modernise SCL.

According to the EoI, the ministry is aiming to make SCL into a research and development-led Centre of Excellence with semiconductor R&D capabilities. It also seeks to transform SCL into an at-scale manufacturing entity with volume production of semiconductor chips and devices.

Earlier, Business Standard reported that the government will spend around $1.2 billion to modernise the SCL in Mohali. Notably, SCL is a 30-year-old facility currently capable of producing 8-inch CMOS microchip wafers mostly used for the country's strategic needs, such as the space programme.

The planned modernisation and commercialisation of the facility is a part of the government's $10 billion India Semiconductor Mission announced in 2021. The Union Cabinet approved the modernisation plan in July 2022, which includes an exploration of the possibility of the joint venture (JV) of the Semiconductor Lab (SCL) with one or more commercial fab partners. However, the government has not provided a projected timeline for the project.

The fab, which started production in 1984, was devastated by a factory fire in 1989 and has not fully recovered its capacity thereafter. Nevertheless, it remains the only fab owned by the government and is credited for creating chips for crucial projects like Mangalyaan, the country's Mars Orbiter Mission.

"We are significantly increasing our electronics capabilities, both in manufacturing, design, and innovation. In the next 10 years, we want to achieve what China took 30 years to achieve in electronics and semiconductors," IT minister for state Rajeev Chandrasekhar then said.

Setting up the semiconductor unit requires huge investments and necessitates suitable infrastructure, like the availability of uninterrupted power and clean water. The complex, technology-intensive sector needs huge capital investments, high risk, long gestation and payback periods, and rapid changes in technology, which require significant and sustained investments.