2024: The Year India Made Its Semiconductor Mark On The Global Stage

As 2024 draws to a close, the year stands out as a significant chapter for India's semiconductor sector.

A thrilling ride of innovation and ambition, highlighted by the groundbreaking three big-ticket projects and a powerful policy boost, has set India on the fast track to becoming a global chip powerhouse.

Swarajya takes a look at major chip-related milestones that occurred throughout the year.

Semiconductor Moment

This evolution began with the groundbreaking of three chip plants—two by Tata Electronics and one by CG Power—representing a total investment of Rs 1.26 lakh crore in March 2024.

At the forefront of this transformation is Tata Electronics, collaborating with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) to build India’s first semiconductor fabrication (fab) in Dholera, Gujarat.

Slated for completion in 2026, this AI-enabled, state-of-the-art fab entails an investment of Rs 91,000 crore, with a production capacity of 50,000 wafers per month.

And that’s just the beginning. Tata Electronics is already planning two more fabs in the region, promising to meet growing global demand. While the partnership details and timelines for these additional fabs are still in the works, production is anticipated to ramp up in five to seven years, matching the scale of the first facility.

Meanwhile, up north in Sanand, the once-quiet town on the outskirts of Ahmedabad is now buzzing with activity as it prepares to host cutting-edge assembly and testing plants—known in the industry as ATMP (assembly, testing, marking, and packaging) and OSAT (outsourced semiconductor assembly and testing).

Here, Murugappa Group’s CG Power has joined forces with Japan’s Renesas and Thailand’s Stars Microelectronics to build a top-tier OSAT facility with a Rs 7,600 crore investment.

The transformation is not confined to traditional industrial corridors.

In the heart of the Northeast, Tata Electronics broke ground on a greenfield OSAT facility in Jagiroad, Assam. This Rs 27,000 crore initiative, the first of its kind in the region, promises to generate over 27,000 jobs while positioning India as a critical player in the global semiconductor supply chain.

In the Offing

2024 has also witnessed the approval of two major projects that promise to reshape India’s semiconductor landscape.

Mysuru-based Kaynes Semicon received the green light to establish an OSAT unit in Sanand with an investment of Rs 3,307 crore and a capacity to produce 6.3 million chips daily.

Meanwhile, in Maharashtra, Gautam Adani’s conglomerate has joined forces with Israel’s Tower Semiconductor to develop a $10 billion semiconductor facility in Panvel, Raigad.

With the Maharashtra government already on board, the project is set to break ground in the new year, pending approval of Tower’s subsidy proposal under India’s ambitious semiconductor incentive scheme from the central government.

A Strategic Leap

This ambitious joint venture between India and the United States was announced following talks between Prime Minister Narendra Modi and US President Joe Biden in Wilmington on 21 September 2024.

Dubbed ‘Shakti,’ this fab will specialise in producing infrared, gallium nitride, and silicon carbide semiconductors—critical components for defence technologies, next-generation telecommunications, and green energy applications.

Backed by the India Semiconductor Mission (ISM), the Shakti fab is being developed through a strategic alliance involving Bharat Semi, 3rdiTech, and the US Space Force.

Shakti will not only be India’s first semiconductor facility of its kind but also one of the world’s pioneering multi-material fabs dedicated to national security.

It's no surprise that the two leaders hailed the fab partnership as a 'watershed arrangement,' as highlighted in the joint fact sheet following the Modi-Biden talks.

Semiconductor Equipment

The intricate art of semiconductor fabrication relies on specialised equipment sourced from a network of global vendors. These Semiconductor Manufacturing Equipment (SME) suppliers, each mastering specific stages of the fabrication process, provide the critical tools that make modern chips possible.

Industry giants like Applied Materials (AMAT), Lam Research (LAM), and KLA in the United States, alongside Advanced Semiconductor Materials Lithograph (ASML) in Europe and Tokyo Electron (TEL) in Japan, dominate this essential supply chain.

Until recently, India's growing semiconductor industry has relied heavily on importing advanced equipment and skilled manpower.

However, this trend began to shift in 2024 when Tata Electronics signed a Memorandum of Understanding (MoU) with Tokyo Electron (TEL) to collaborate on front-end fabrication and back-end packaging technologies.

The collaboration will drive the development of semiconductor equipment infrastructure for India’s first fab, being built by Tata Electronics in Dholera, along with its assembly and testing facility in Assam.

Building on the momentum, California-based Applied Materials, the world’s second-largest fab toolmaker with annual revenues of $26.52 billion, announced plans to establish a manufacturing unit in Tamil Nadu, India.

Why It Matters

Semiconductors—the world’s fourth-most-traded product—are the heartbeat of the modern global digital economy. These tiny chips power everything from smartphones and electric vehicles to the humblest household appliances, making them both the literal and figurative engines of the modern world.

In the race for innovation, access to the most sophisticated semiconductors provides a decisive first-mover advantage. Simply put, semiconductors are essential for both enterprises and nations to compete on the global stage; they represent the 'commanding heights' of the modern global digital economy.

India's determination to carve a significant niche in this high-stakes arena is finally paying off. After a shaky start, New Delhi’s aggressive push—offering some of the world’s most generous incentives—has begun to attract substantial semiconductor investment.

Yet, the global race for semiconductor supremacy is as fierce as it is unforgiving. Nations, along with their states, regions, and cities, are now vying for a share of the semiconductor pie, often competing as price takers rather than price makers.

As the new year begins, prioritising semiconductor investment—especially in capital-intensive fabrication facilities—must remain at the forefront of India’s agenda.