After India approved three chip projects to develop a local chipmaking ecosystem, an Indian government official disclosed the country is likely to see at least 2-3 wafer fabs and three ATMP/OSAT facilities in the coming years.
S Krishnan, secretary of the Ministry of Electronics and IT of India, told the Economic Times in an interview that the Tata-PSMC project will be India's first wafer fab, and at least two to three wafer fabs will be built in India in the next two to three years.
According to Krishnan, as the semiconductor foundry is a capital-intensive industry and prone to economic cycles, continued investments are needed, which may require the government to come in, adding that if the funds under the INR760 billion semiconductor and display fabs incentive scheme are exhausted, the Indian government will put in more money.
Regarding the ATMP/OSAT sector, Krishnan said three companies or consortiums are committed to investing in India, including Micron in Gujarat, Tata in Assam, and CG Power-Renesas-Stars Microelectronics in Gujarat. Still, Krishnan said three ATMP/OSAT facilities are not enough to meet demands in India, which needs packaging and testing capacities in products for memories, logical ICs, and compound semiconductors.
Besides the ATMP/OSAT projects mentioned by Krishnan, Rediff reported that three projects, including HCL-Foxconn, Hiranandani Group, and Kaynes Technology, were proposed to the Indian government and are waiting for government approval.
Micron's ATMP facility in Gujarat announced in 2023 is expected to be put into operation in early 2025. With the construction and technology assistance from PSMC, Tata's wafer fab will begin construction in March. CG Power's OSAT facility is anticipated to commence construction in mid-2024.
India notified the Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India in December 2021. No project was cleared under the incentive scheme in 2022, as projects from Vedanta, ISMC, and IGSS Ventures failed to receive approval.
In the following year, the semiconductor ecosystem development accelerated. In 2023, amid the deepening bilateral cooperation between the US and India on semiconductors, Micron announced its first ATMP project in India in 2023. The South Asian country also changed tack by modifying the incentive scheme in July 2023, providing longer application windows, providing more funds, and focusing more on ATMP/OSAT rather than wafer fabs.
