Fiscal support pact key step towards Rs 91,000 crore semiconductor project: Centre

New Delhi: In a boost for the domestic semiconductor industry, India Semiconductor Mission (ISM), Tata Electronics Private Limited (TEPL), and Tata Semiconductor Manufacturing Private Limited (TSMPL) have signed a fiscal support agreement (FSA) for the country’s first commercial chip fab in Dholera, Gujarat.

Signed in the presence of Gujarat Chief Minister Bhupendra Patel at the ‘Semiconnect conference’ in Gandhinagar, the pact represents a decisive step forward in strengthening India’s technological self-reliance under the modified programme for semiconductor and display manufacturing ecosystem in India.

Tata Electronics’ semiconductor fab in Dholera commands a total investment of over Rs 91,000 crore with a capacity of 50,000 wafers starts per month (WSPM).

The government, through the India Semiconductor Mission, has committed 50 per cent fiscal support on a “pari-passu” basis (on equal footing) for eligible project costs —demonstrating unwavering national commitment to building a world-class semiconductor ecosystem within Indian borders.

Set to generate over 20,000 direct and indirect skilled jobs, this project brings Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) expertise to India, creating a powerful technological alliance.

The facility will address critical global semiconductor markets in automotive, computing, communications, and artificial intelligence sectors — transforming India from a technology consumer into a global manufacturing powerhouse, according to the government.

Sushil Pal, CEO of the India Semiconductor Mission, emphasised that “the government is committed to the timely disbursement of fiscal support for the execution of this project”.

“We are confident that Tata Electronics will play a pivotal role in strengthening the electronics value chain and make a significant contribution to India’s overarching goals in this sector,” he mentioned.

According to Dr Randhir Thakur, CEO and MD, Tata Electronics, this is a historic milestone for India and Tata Electronics in its journey of establishing a semiconductor manufacturing industry in the country.

“The Fiscal Support Agreement (FSA) solidifies our partnership with MeitY and ISM to realise Prime Minister’s vision of manufacturing chips for Viksit Bharat,” Thakur noted.

—IANS