Few things in technology are harder to make than semiconductors. India Inc is having a go anyway. With the government backing them, companies have already committed some $20 billion — small change by global standards, but a beginning. From fabs and foundries to chips and wafers, the bets span the entire gamut.
Tata Electronics may look like the standout player making the big bets, but smaller houses are in the fray too. The Murugappa Group is banking on clean energy and semiconductors to meaningfully lift revenues, while the likes of HCL Technologies and Kaynes have decided the risk is worth the reward. Almost all of them have roped in technology partners, and some have signed overseas supply agreements to de-risk their ventures.
The prize is considerable. Domestic demand is forecast to touch $110 billion by FY30 and top $200 billion by FY35. And whatever the revenues, local production would help trim an import bill that added up to about $150 billion over FY17-FY25.
Of the $20 billion committed so far (including government support), Tata Electronics’ Rs 1.18 lakh crore — for a fab and a packaging facility — is the biggest. For the Rs 91,000 crore fab at Dholera, Gujarat, which will produce analog and logic chips on 28-110 nanometre technologies, it has partnered Taiwan’s PSMC. Its OSAT (outsourced semiconductor assembly and testing) unit in Assam, a Rs 27,000 crore investment, is designed to package around 48 million chips a day for automotive, EV, telecom and consumer electronics applications. CEO Randhir Thakur has confirmed both ventures are on track.
The Murugappa Group’s CG Power is powering ahead, having begun commercial production at its Rs 7,600 crore OSAT facility in Sanand in July. Partnered with Japan’s Renesas Electronics and Thailand’s Stars Microelectronics, it is rolling out both legacy and advanced packages. Chairman Vellayan Subbiah said last week that the larger second phase should be running by end-2027 or early 2028, taking capacity from 0.5 million to 15 million units a day. Competing in export markets won’t be easy, but the Renesas agreement provides an offtake for 40-50% of production; the first shipment has already gone to Renesas customers in Malaysia. Subbiah isn’t ruling out a fab someday, though it’s not on the table yet. What is clear is that clean energy and semiconductors are tipped to drive the group’s next phase of growth.
Kaynes, meanwhile, began commercial production at its Rs 3,800 crore Sanand OSAT in March, with tie-ups with Malaysia’s Globetronics and Taiwan’s Aptos Technologies. The facility is designed to scale to about 6 million units a day, with the final phase expected by 2028. By 2030, annual sales could hit Rs 2,560 crore — about a fifth of group revenues. And the stakes could soon get much bigger: CEO Raghu Panicker has said Kaynes plans a roughly $1-billion advanced-packaging project in Gujarat under Semicon 2.0.
The HCL-Foxconn OSAT at Jewar, Uttar Pradesh, is under construction; its display driver chips — for autos, mobiles and laptops — are expected to roll out by early 2028.
The startups are stirring too. Bengaluru-based Agnit Semiconductors, a vertically integrated gallium-nitride (GaN) products company, is developing components for wireless transmission and power conversion. Co-founder and CEO Hareesh Chandrasekar pegs the market across radio-frequency and power-electronics applications at $6 billion — and says early commercial traction is critical to proving the product.
Tomorrow: Data centres