On September 27, 2024, Power Semiconductor Manufacturing Co., Ltd., a major wafer foundry, announced that it had signed a Definitive Agreement (Definitive Agreement) with Tata Electronics, a subsidiary of the Indian Tata Group, in New Delhi. Power Semiconductor Manufacturing Co., Ltd. will assist Tata Electronics in building India's first 12-inch wafer fab in Dholera, Gujarat, India, and transfer mature process technology and train Indian employees.
At the signing ceremony that day, Power Semiconductor General Manager Zhu Xianguo and India's Tata Electronics CEO Randhir Thakur officially signed the final cooperation agreement. Huang Chongren, chairman of Power Semiconductor Manufacturing Co., Ltd., also attended the event in person.
Investing 11 billion yuan, Power Semiconductor and Tata Electronics jointly built India's first 12-inch wafer fab
In fact, as early as February 29 this year, Power Semiconductor announced its plan to cooperate with Tata Electronics to build the first 12-inch wafer fab in India.
Huang Chongren, chairman of Power Semiconductor Manufacturing Co., Ltd., said in an interview at the time that the first 12-inch wafer fab built by Power Semiconductor Manufacturing Co., Ltd. to assist Tata Electronics in India would be 70% funded by the Indian government. Power Semiconductor Manufacturing Co., Ltd. mainly provided technology transfer rather than investment.
That is to say, Power Semiconductor will provide process technology, factory construction and production line operation experience. After the wafer factory operation is on track, it will gradually fade out of the cooperatively established wafer factory, and may only exist in a shareholding model in the future.
Huang Chongren also revealed that the cooperation between Power Semiconductor and Tata Electronics was reached at the request of Tsai Ing-wen, the governor of Taiwan Province of China.
According to the final agreement signed by the two parties, the total investment in India's first 12-inch wafer fab jointly constructed by Power Semiconductor and Tata Electronics will reach US$11 billion, with a monthly production capacity of 50,000 wafers, and is expected to create more than 20,000 high-tech job opportunities for the local area. The specific start time has not yet been determined.
Previous news revealed that the 12-inch wafer fab mainly uses Power Semiconductor's mature process technology and plans to produce power management, panel driver chips and microcontrollers, high-speed computing logic chips, etc., mainly for automotive, computing and data storage, wireless communications and artificial intelligence and other terminal application markets.
Indian Prime Minister Narendra Modi also met with Power Semiconductor Chairman Huang Chongren and General Manager Zhu Xianguo on the 26th.
△Indian Prime Minister Narendra Modi (middle) met with Power Semiconductor Chairman Huang Chongren (second from left), General Manager Zhu Xianguo (first from left), and Tata Electronics CEO Randhir Thakur (first from right) of Power Semiconductor on the 26th.
Huang Chongren told Modi that the upstream and downstream of the semiconductor manufacturing industry covers thousands of small and medium-sized enterprises, and he hopes that the Indian government can create a friendly business environment for Taiwanese companies coming to India to develop and protect the investment of Taiwanese businessmen in India.
At the same time, the Indian market has huge potential and a large number of excellent human resources. In the future, there will be opportunities to cooperate with Taiwan's chip design industry to create win-win opportunities for Taiwan-India cooperation in the semiconductor market.
Modi also responded that the Indian government will fully support the 12-inch wafer fab construction plan of Power Semiconductor and Tata Electronics. At the same time, he deeply appreciates Huang Chongren's proposal of Taiwan, China and India to jointly promote the chip design industry. He hopes that Power Semiconductor can actively participate in the development of India's semiconductor industry. The government will also assist Taiwanese manufacturers to invest in India.
Huang Chongren and Zhu Xianguo also held talks with Indian Minister of Electronics and Information Ashwini Vaishnaw on the 26th.
Minister Vaishnaw said that the Indian government will provide assistance to the friendly business environment and investment protection mentioned by Huang Chongren for Taiwanese businessmen to develop in India, with a view to building a high-tech industrial ecosystem in India that is mutually beneficial and win-win for both Taiwan and India.
△Power Semiconductor Chairman Huang Chongren (second from right), General Manager Zhu Xianguo (first from right) and Tata Electronics CEO Randhir Thakur (first from left) visited Indian Minister of Electronics and Information Ashwini Vaishnaw on the 26th
Tata Group moves into semiconductor manufacturing
In recent years, as the COVID-19 epidemic and geopolitical conflicts have intensified, countries have paid more and more attention to the security of semiconductor supply chains. The United States, the European Union, Japan, India, etc. have provided huge subsidies to vigorously develop the local semiconductor manufacturing industry.
As India's largest technology group company, Tata Group announced in December 2022 that it planned to invest US$90 billion in the next five years, hoping to produce local Indian chips in the next few years and make India a key player in the global chip supply chain.
Tata Electronics is a wholly-owned subsidiary of Tata Sons, an investment holding company of the Tata Group. It is also the main operating platform of the Tata Group to develop semiconductor manufacturing.
In addition to the 12-inch wafer fab in cooperation with Power Semiconductor Manufacturing Co., Ltd., Tata Electronics also plans to spend $3 billion to build a semiconductor factory in Jagiroad, Assam, India, for the construction and testing of semiconductor chips. Tata Electronics also plans to build two more wafer fabs after the first 12-inch wafer fab comes online in 2026.
A few days ago, on September 18, the Tata Group also announced the establishment of a strategic alliance with analog chip manufacturer ADI (Analog Devices Inc.) to explore opportunities to cooperate in establishing a chip manufacturing plant in India.
According to reports, India’s Tata Group launched Tata Electronics, Tata Motors and Tejas Networks and signed a memorandum of understanding with ADI. The two parties will explore opportunities for semiconductor manufacturing business in India, as well as opportunities to use ADI in Tata Motors’ electric vehicles and Tejas’ network infrastructure. The company also agreed to discuss strategic roadmap adjustments.
Tata Electronics and ADI intend to explore future opportunities to produce ADI products at Tata Electronics’ 12-inch wafer fab in Gujarat in partnership with Power Semiconductor Manufacturing Co., Ltd. and its semiconductor packaging and testing facility in Assam.
Tata Motors and ADI intend to explore participation in energy storage solutions in the automotive and ride-hailing business Tejas Networks and ADI intend to explore opportunities to participate in electronic hardware components of network infrastructure.
India’s dream of becoming a semiconductor powerhouse
In order to stimulate the development of the local chip manufacturing industry, as early as the end of 2021, India announced an incentive plan of approximately US$10 billion, which can provide incentives of up to 50% of the project cost.
The Indian government opened applications for "tens of billions of dollars in subsidies" in January 2022, giving relevant manufacturers 45 days to apply.
Although the time window is relatively short, the Indian government still feels that it will be fruitful. In the end, only ISMC, a joint venture led by Tower Semiconductor, Hon Hai and Vedanta, and Singaporean technology company IGSS submitted subsidy applications for setting up semiconductor factories in India.
In the end, because all the Indian factory projects of companies applying for subsidies were launched indefinitely or canceled (for example, Hon Hai withdrew from its joint venture with Vedanta to build a 28-nanometer 12-inch wafer fab plan),As a result, the US$10 billion in subsidies cannot be spent at all.
The core issue focuses on India’s requirements for technology partners, which also makes the semiconductor investment projects of related companies meet the requirements for obtaining subsidies.
Subsequently, the Indian government revised the relevant technical requirements and subsidy standards, relaunched the US$10 billion Indian semiconductor subsidy program in the first half of 2023, and significantly relaxed the time window for subsidy applications from the previous 45 days. Qualified companies can apply before the end of 2024.
At the time, the Indian government stated that the subsidy policy had attracted approximately 18 proposals for building chip manufacturing facilities.
In early September 2024, the Indian state of Maharashtra has approved a US$10 billion investment plan to build a wafer fab in Panvel, Raigad District, Maharashtra, by Israeli wafer foundry company Tower Semiconductor and Indian conglomerate Adani Group.
It will be divided into two phases, each creating one module with a manufacturing capacity of 40,000 wafers per month. 587 billion rupees (about 7 billion U.S. dollars) will be invested in the first phase and 251 billion rupees (about 3 billion U.S. dollars) in the second phase, so a total of 839 billion rupees (about 10 billion U.S. dollars) will be invested.
However, the plan still awaits approval from the central government of India to qualify for subsidies under Indian government schemes. Without significant subsidies - perhaps more than 50% of the cost - the project may stall.
In addition, in the first half of 2023, India and the United States reached a semiconductor supply chain and innovation partnership.
Subsequently, driven by the US government, Micron announced in June 2023 that it would invest up to US$825 million to build a new semiconductor packaging and testing facility in India with the support of the Indian government, and will build another packaging and testing plant in due course. The total investment by Micron and Indian government entities in the two phases will be up to $2.75 billion.
It can be said that so far, it seems that only Micron’s plan to build a packaging and testing plant in India has entered the actual implementation stage. Other announced semiconductor manufacturing projects in India remain on paper.
According to the Information Technology and Innovation Foundation (ITIF), a technology policy think tank headquartered in Washington, DC, India may only be able to create five chip factories by 2029.And the most advanced products of these factories will be chips manufactured based on the 28nm process.
This also means that India cannot compete with powerful countries or regions in the semiconductor field such as China, Taiwan, South Korea, the United States, the European Union, and Japan.