4 days ago
Cabinet approves ₹18,500 crore semiconductor, infrastructure projects
NEW DELHI: The Union cabinet on Tuesday approved key manufacturing and infrastructure projects worth approximately ₹ 18,500 crore.
Among the approvals are four new semiconductor projects in Odisha, Punjab, and Andhra Pradesh; a 700 MW Tato-II hydroelectric project in Arunachal Pradesh; and the expansion of the Lucknow metro over the next five years.
With Tuesday's approvals, the total number of semiconductor projects officially sanctioned by the Centre's India Semiconductor Mission has risen to 10, since Micron's memory chip packaging plant was approved in Sanand, Gujarat, in June 2023.
Of these, four projects, including India's only modernized chip fab by Tata Electronics, are located in Gujarat, two in Odisha, and one each in Assam, Uttar Pradesh, Punjab, and Andhra Pradesh.
Industry stakeholders noted that while the four new projects may not involve large capital outlays, they are strategically important as part of efforts to consolidate investments under the India Semiconductor Mission's first tranche of nearly $10 billion.
Ankush Wadhera, managing director and partner, and India semiconductor practice head at Boston Consulting Group (BCG), said that the biggest project under Tuesday's announcements, the SicSem compound chip fab, 'is crucial in various high voltage industrial applications.'
'The list of approved projects until yesterday had one silicon fab, a chip testing and packaging setup, and four chip testing and assembly plants. Even with the modernization of the Centre-owned SCL (Semi-Conductor Laboratory, Mohali), there were some gaps in our nation's semiconductor ecosystem that the new announcements will help address,' he said.
Wadhera added that the new announcements could also increase the pace of development and output at the traditional outsourced semiconductor assembly and test (Osat) plants.
The four newly approved proposals carry a cumulative investment of around ₹ 4,600 crore and are expected to generate employment for approximately 2,034 skilled professionals, according to an official statement.
A silicon carbide semiconductor plant will be set up in Bhubaneswar by SiCSem Pvt Ltd.
'The SicSem project in Odisha is an integrated semiconductor project, which means that it will have both a compound semiconductor fabrication plant, as well as a chip testing and packaging unit. The second Odisha project with HIPS is an advanced packaging plant for glass substrates, which are applicable in crucial industries. The applicant is also making the substrates innovatively, in order to maximize yield—which makes the project very interesting,' said a senior government official close to the developments.
Compound semiconductors are made from silicon combined with other elements. They require different fabrication techniques and are primarily used in strategic industrial applications such as space launches, high-intensity sectors like automotive and railways, and resilient systems including power grids and oil rigs.
Ajai Chowdhry, industry veteran and cofounder, HCL, added that the announced 'mark a very good move by the Centre to diversify the range of semiconductor projects at hand.'
'A compound chip fab was absolutely the ask of the hour, and the Centre has done well to make a well-strategized announcement with it. The announcements also showed the range of excellent state-level semiconductor policies, and many states are offering excellent benefits to the technical firms in the form of land parcels and other advantages. This will contribute further to the overall semiconductor supply chain, which will all go in to support the outright silicon fabs in the industry,' Chowdhry added.
Heterogenous Integration Packaging Solutions Pvt Ltd will establish a vertically integrated advanced packaging and embedded glass substrate facility in Bhubaneswar, Odisha, with a planned annual capacity of approximately 69,600 glass panel substrates, 50 million assembled units, and 13,200 3DHI modules, according to the official statement.
Advanced System in Package Technologies (ASIP) will establish a semiconductor manufacturing unit in Andhra Pradesh under a technology tie-up with APACT Co. Ltd, South Korea, with an annual capacity of 96 million units. The manufactured products will serve applications in mobile phones, set-top boxes, automobile systems, and other electronic products.
'ASIP's Andhra Pradesh project is also an advanced packaging project for industrial chips, while Continental's project—the smallest of the lot—is a brown-field expansion of India's oldest existing and running chip testing plant. Overall, the projects come to add significant depth to the overall semiconductor ecosystem,' the government official added.
Separately, the Cabinet Committee on Economic Affairs (CCEA) approved an investment of ₹ 8,146.21 crore for the construction of the Tato-II Hydro Electric Project (HEP) in Shi Yomi district, Arunachal Pradesh, with an estimated completion timeline of 72 months.
The 700 MW project (4 units of 175 MW each) is expected to generate 2,738.06 million units of energy. It will be implemented through a joint venture between the North Eastern Electric Power Corp. Ltd. (NEEPCO) and the Arunachal Pradesh government.
The Centre will provide ₹ 458.79 crore in budgetary support for enabling infrastructure such as roads, bridges, and transmission lines, along with ₹ 436.13 crore as central financial assistance towards the state's equity share, according to another official statement.
Arunachal Pradesh will benefit from 12% free power and an additional 1% allocation towards the Local Area Development Fund (LADF), it said.
This development aligns with the government's goal to reach 500 GW of non-fossil fuel power generation capacity by 2030 as part of its energy transition and net-zero carbon emission targets.
