With 12 plants in phase one, India's chip-making mission sets sights on next frontier, Pg15

Key Highlights:

• The Union Cabinet approved two new semiconductor plants, including a potential first display fabrication facility, boosting India's chip-making ambitions.
• Total of 12 chip plants approved under the first phase of India Semiconductor Mission (ISM), a Rs 76,000-crore plan.
• Tata Electronics is setting up India’s first commercial-grade chip fabrication plant in Dholera, Gujarat with an estimated investment of Rs 91,000 crore.
• Micron Technology started commercial production of memory chips in Gujarat in February 2026, the first project approved under ISM 1.0 in 2023.
• HCL-Foxconn joint venture is setting up a Rs 3,700 crore OSAT facility in Jewar, Uttar Pradesh, expected to be operational by 2028.

Detailed Insights:

• India Semiconductor Mission (ISM) 1.0, launched in 2021 with an investment of around Rs 1.64 lakh crore, aimed to build a full-stack chip ecosystem, from fabrication and packaging to design and display manufacturing.
• ISM 2.0, announced in this year’s Union Budget, will focus on producing equipment and materials, designing full-stack Indian intellectual property, and fortifying supply chains.
• The 12 approved chip plants are located in Gujarat, Assam, Andhra Pradesh, Uttar Pradesh, and Odisha, including a commercial semiconductor fabrication facility, and assembly and testing plants.
• ISM 2.0 may reduce the capex subsidy for ATMP or OSAT plants from the current 50% and offer capital equipment and ecosystem support such as gases, chemicals, and raw materials.
• The government is considering a scheme with an outlay of around $11 billion for ISM 2.0, focusing on ancillary industries and a more significant design-side push, tying incentives to market capitalization.

Key Concepts Involved:

• Semiconductor: A material with electrical conductivity between a conductor and an insulator, used in electronic devices.
• Display Fabrication Facility: A specialized facility for creating electronic screens like LCD and OLED by layering materials on glass semiconductor bases.
• OSAT (Outsourced Semiconductor Assembly and Test): A company that provides semiconductor assembly and testing services to other companies.
• ATMP (Assembly, Test, Marking, and Packaging): The final stages of semiconductor manufacturing, involving assembly, testing, marking, and packaging of chips.