India’s Semiconductor Mission Expands with HCL-Foxconn Chip Plant Near Jewar:

Suspense crime, Digital Desk : Union Cabinet approved a new semiconductor fabrication plant in Uttar Pradesh close to the Jewar Airport on May 14. Foxconn, the Taiwanese electronics behemoth, is in partnership with HCL, the Indian tech giant, to develop the plant.

With an expected expenditure of Rs 3,700 crore, this facility plans to capture 20,000 wafers every month while having an output of approximately 36 million units on a monthly basis. This plant aims to produce display driver chips critical for smartphones, laptops, digital dashboards in automotive vehicles, and all other digital screens.

This unit serves as a further step in aiding the nation develop an ecosystem built around semiconductor technology, as Indian government labels this as the sixth approved unit.

Summary of the India Semiconductor Mission (ISM)

The mission was launched in 2021 and has been touted as the flagship program of the government to develop the entire chip design and manufacturing ecosystem, hence referred to as ‘full-stack’. They’ve put forward a budget of 76,000 crores for the program in the ISM, focusing on the reduction of import dependency, boosting production inside India, and increasing partnerships outside of the nation.

India is known to have around 65-70% of the components of electronics imported from China, something that India aims to turn around in hopes of pulling the position of the nation to the centerpiece for global semiconductor manufacturing.

The semiconductor industry in India is witnessing rapid expansion, highlighted by the following milestones:

Tata and Powerchip (Taiwan): Fab in Dholera, Gujarat, Rs 91,526 crore; production expected by 2026
Micron (US): ATMP facility in Sanand, Gujarat
Foxconn-HCL: Display chip unit in Jewar, Uttar Pradesh, Rs 3,700 crore
Tata Electronics: ATMP facility in Assam, mid-2025 commencement
CG Power, Renesas, STARS Microelectronics: OSAT unit in Sanand
Kaynes Technology: OSAT plant, approved September 2024

Why India is Investing Heavily in Semiconductors

Consumer electronics, electric vehicles, medical technology, and defense are primary contributors to the India semiconductor market, valued at $45 billion in 2023 and projected to surpass $100 billion by 2030.

Self-sufficiency was a massive hurdle India faced during the COVID-19 pandemic, and with the nation ranking second in global 5G smartphone consumption, these investments are increasingly favorable for the market.

Government Schemes Fueling Semiconductor Progress

Several government schemes are made to support ISM:

Semicon India Programme: Offers a subsidy for fabs and design units of up to 70%

PLI for Electronics: Created output of more than Rs 5 lakh crores since 2020

SPECS Scheme: Gives 25% capital subsidy on investment in chip components

Chips-to-Startup (C2S): Training 85,000 engineers in 113 institutes

DLI: Supports local IP and chip design by providing incentives

270 institutions and over 70 start-ups are working on chip innovation. 20 designs have been taped out at Semi-Conductor Laboratory (SCL) Mohali.

Challenges That May Slow Down Progress

Nonetheless, these factors might still pose a problem.

Major Capital Investments: The cost of fab plants can exceed $10 billion

Skill Shortage: A new study estimates a shortage of 250,000-300,000 skilled workers by 2027

Supply Chain Weakness: There is a supplier and infrastructure gap, as well as a lack of sophisticated tools

Market Concentration: Taiwan and South Korea comprise 80% of worldwide chip manufacturing

Impact of India’s Diplomacy Strategy and Vision

India is creating technology partnerships in the Quad with US, Japan, and Australia and has signed research and development agreements with EU and Japan. A conversation is in place with the US for a defense semiconductor factory in Uttar Pradesh.

Specialists recommend establishing an India Semiconductor Research Centre (ISRC) for nurturing R&D and talent, like Taiwan's ITRI. India's goal is to capture a 10% share of the $1 trillion chip market projected for 2030.