TATA's Monumental $27 Billion Semiconductor Venture in Assam

Revolutionizing India’s Tech Landscape: TATA‘s Monumental $27 Billion Semiconductor Venture in Assam

A Leap Forward for NE: Assam’s Groundbreaking Entry into Semiconductor Industry

MOHAN KHOUND

In a monumental move that could redefine India’s position in the global tech industry, Tata Group has been given the green light for a $27 billion ( Indian Rupees 27000 crores) semiconductor assembly and test facility in Assam.

This project, part of the government’s ambitious semiconductor policy, represents a significant milestone for a region traditionally overlooked by major private sector investments.

TATA's Monumental $27 Billion Semiconductor Venture in Assam

For decades, India’s private sector industrial activities were predominantly concentrated in states like Maharashtra, Gujarat, Karnataka, and Delhi, with regions like Punjab and West Bengal experiencing a decline.

However, the landscape began to shift as new investment destinations emerged, including Tamil Nadu, Andhra Pradesh, Odisha, and most recently, Uttar Pradesh. Now, Assam has joined this elite club, signaling a potential economic transformation for Northeast India.

On February 29, the Centre approved a Production-Linked Incentive (PLI) for Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) to establish a semiconductor assembling and testing unit near Guwahati.

This plant is set to develop cutting-edge semiconductor packaging technologies, such as flip chip and integrated system in package (ISIP), with a staggering output of 48 million chips per day. These chips are destined for a range of sectors, including automotive, electric vehicles, consumer electronics, telecom, and mobile phones.

The significance of this investment cannot be overstated. On the same day the Union cabinet approved three semiconductor projects, two of which were allocated to Gujarat, recognized as a burgeoning semiconductor hub with companies like Micron already setting up operations there. This trend of high-profile tech investments gravitating towards the South and West of India is now being challenged by Assam’s entry into the scene.

Historically, private investment in Assam was sparse, with only a handful of FMCG companies such as Hindustan Unilever, Patanjali, and Emami establishing manufacturing units within the last decade. The semiconductor project not only eclipses these in terms of investment magnitude but also marks a departure from the state’s reliance on public sector investments in areas like refining and electricity generation.

This leap forward for Assam can be attributed to the concerted efforts of its political leadership. Former Chief Minister Sarbananda Sonowal and current Chief Minister Himanta Biswa Sarma played pivotal roles in persuading both the Tata Group and the Central Government to invest in the state.

Sonowal’s close relationship with Prime Minister Narendra Modi and Sarma’s connection with some others were instrumental in bringing this project to fruition, despite the inherent risks associated with Assam’s limited industrial background and skills base.

The Tata Group and the Modi government are putting their faith in Assam’s potential to rise to the occasion. The PLI approval for the project was not a swift decision; it was mired in six months of deliberation due to concerns about Assam’s capability to support such a high-tech venture.

The careful consideration by the Ministry of Electronics and Information Technology (MEITY) underscores the strategic importance of this project to India’s semiconductor ambitions.

The approval of this project is a testament to the persistence and influence of Sonowal, who tirelessly lobbied for Assam’s case. Ultimately, this is a victorious moment for the state, marking a new chapter in its economic development.

Beyond Assam, the Union Cabinet has also approved a semiconductor fabrication proposal from Tata Group, with Taiwan’s Powerchip Semiconductor Manufacturing Corp as its technology partner.

This project is expected to see an investment of Rs 91,000 crore and will be located in Dholera Special Investment Region, Gujarat. With a production capacity of 300 crore chips annually, this project is set to commence construction within 100 days.

Minister Vaishnaw has emphasized that these projects are vital for industries including electric vehicles, telecom, defense, and consumer electronics. Additionally, a third semiconductor proposal has been approved for Gujarat. Combined, these projects are expected to contribute to direct employment for 20,000 individuals and create approximately 60,000 indirect jobs.

The approval of Tata’s semiconductor assembly and test facility in Assam is not just a milestone for the state but a strategic leap for India’s tech industry.

With the potential to create a robust semiconductor manufacturing ecosystem, this project will significantly contribute to India’s industrial prowess and job creation, particularly in the Northeastern region. It is a bold step that could catalyze India’s journey towards becoming a global semiconductor powerhouse.

01-03-2024

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