News Brief

Mohali Semiconductor Lab Overhaul: Tata, Tower And Texas Among Nine Bidders For $1 Billion Modernisation Plan

Kuldeep Negi

Jan 31, 2024, 02:58 PM | Updated 02:58 PM IST

A semiconductor chip (Representative Image)
A semiconductor chip (Representative Image)

Tata Group, Tower Semiconductor and Texas Instruments are among the nine companies that have reportedly submitted bids to the government to revamp the Semiconductor Laboratory (SCL) in Mohali.

The government has earmarked around $1 billion for updating the 48-year-old facility.

SCL, a government-owned entity, is India's sole semiconductor production facility, manufacturing chips for strategic and defence uses, including in space missions like Chandrayaan.

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“The need for modernisation of SCL is for a strategic purpose,” a senior government official was quoted as saying by The Economic Times.

The official expressed a preference for a domestic company to handle the project due to its national importance.

This comes as the Tata Group has been gearing up to enter India's chip manufacturing sector in recent years, with chairman N Chandrasekaran announcing plans to establish a facility in Dholera earlier this month.

Israel-based Tower Semiconductor, which has previously assisted in planning SCL's 180-nanometer chip plant, is reportedly keen to expand into India's commercial chip production market.

Meanwhile, Texas Instruments also has substantial chip R&D operations in India.

The government will request financial bids once it finalises the specific nodes for the facility's production capabilities, another senior official was quoted as saying in the ET report.

The firm, which will be given the final mandate, may have to partner with a technology firm that has licensing grade semiconductor technology, the official added.

Currently, the Mohali plant produces 180 nm node size chips, which have limited applications.

The Electronics and IT Ministry officials aim to upgrade the facility's technology to industry-standard legacy nodes of 65 and 40 nm, eventually targeting more advanced nodes.

Initially established in 1976 as Semiconductor Complex Limited, the organisation aimed to advance India’s semiconductor manufacturing ambitions. However, it has fallen behind in production and technology compared to private firms.

The $1 billion for SCL's modernisation is part of a broader $10 billion government initiative to establish a semiconductor chip fabrication ecosystem in India.

Officials hope to attract more bids, especially from domestic companies, due to the project's national importance.

SCL's focus has been on continuous R&D, and it is not expected to enter commercial chip production.

In September 2023, bids were invited by the government to transform the Mohali facility into either a R&D centre of excellence, a large-scale manufacturing facility, or a combination of both.

The ministry's bid document stated that SCL would continue to meet the semiconductor chip needs of government agencies like ISRO.

The selected bidder would be responsible for the entire R&D fab setup, technology transfer, equipment supply, installation, operational testing, commissioning, skilling of manpower, and periodic maintenance.

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Kuldeep is Senior Editor (Newsroom) at Swarajya. He tweets at @kaydnegi.

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