Three plants shipping, nine more on the way: Unpacking PM Modi’s chips-&-minerals pledge in Independence Day speech
Modi's Semiconductor Vision: From Red Fort to Global Supply Chains
Bharatmorningnews.com – During his Independence Day address from the historic Red Fort, Prime Minister Narendra Modi devoted considerable attention to semiconductor technology—a topic that would have seemed improbable just ten years prior. The Prime Minister highlighted that three manufacturing facilities have commenced operations, with production destined for international markets, while anticipating that "another five to eight semiconductor plants are likely to become operational" in coming years.
Turning toward critical minerals, Modi emphasized India's strategic initiatives, including the National Critical Minerals Mission and the Critical Mineral Corridor announcement. He noted that "nations around the world are increasingly placing their trust in India" regarding mineral resources and supply chain reliability.
The Three Operating Facilities
The three plants referenced by the Prime Minister operate within Gujarat's Sanand industrial cluster. Rather than producing chips from raw materials, these facilities specialize in final processing stages.
Micron Technology's $2.75 billion installation, which opened in February, handles packaging and testing of DRAM and NAND memory chips used across consumer electronics and data centers. Commercial shipments began earlier this year. Kaynes Semicon's facility achieved commercial status on March 31, merely fourteen months following groundbreaking, and is expanding capacity to reach 6.3 million chips daily. The newest addition—a joint venture between CG Power, Japan's Renesas, and Thailand's Stars Microelectronics—commenced commercial production on July 4.
Industry terminology refers to this phase as OSAT, standing for outsourced semiconductor assembly and test. India's domestic policy documents frequently use the acronym ATMP, representing assembly, testing, marking and packaging. Both terms describe identical operations: processing finished silicon wafers etched elsewhere by cutting, wiring, and packaging them into market-ready chips.
This manufacturing stage proves challenging to execute at Kaynes' remarkable pace of fourteen months from groundbreaking to commercial shipment. However, it differs fundamentally from chip fabrication, a more complex and capital-intensive process requiring transistor construction directly onto raw silicon substrates.
Project Pipeline and Future Expansion
Leading up to the Independence Day address, the India Semiconductor Mission reported twelve projects within its inaugural phase. Three have achieved commercial production status, leaving nine additional initiatives in development.
Among these pending projects is Tata Electronics' wafer fabrication plant in Dholera, Gujarat—India's first true fabrication facility. According to Union IT minister Ashwini Vaishnaw, the first chip from this facility should emerge by December. Tata also operates a separate assembly and test facility in Jagiroad, Assam, which remains uncommissioned.
Other projects advancing include an HCL-Foxconn packaging unit at Jewar near NCR's new airport in Gautam Budh Nagar, a silicon-carbide installation in Odisha, two Gujarat packaging facilities approved in May, and a recently cleared Rajasthan project awaiting detailed announcement.
Therefore, the Prime Minister's projection of five to eight projects becoming operational within seven to eight years aligns with the current pipeline.
Semicon 2.0: Targeting Advanced Manufacturing
The India Semiconductor Mission's recently approved second phase represents a strategic shift. All facilities operating or under construction under the first phase—₹76,000 crore programme launched in 2021—occupy the less demanding segment of the semiconductor industry, focusing on packaging, testing, and one fabrication plant utilizing mature manufacturing nodes rather than cutting-edge technology.
Semicon 2.0, approved by the Cabinet in July with ₹1,27,500 crore allocation, addresses gaps left by the initial phase. Priority areas include equipment and specialty materials—more than 90 percent of which India currently imports—domestic chip design capabilities reducing reliance on foreign architectures, and a development roadmap targeting advanced 2-nanometre and 3-nanometre chips.
The initiative also seeks to cultivate at least fifty "fabless" chip-design companies. These enterprises create chip designs without owning manufacturing facilities, outsourcing production much like international corporations such as AMD and Qualcomm operate.
Currently, India's annual chip consumption approaches $50 billion, with domestic manufacturing contributing less than $3 billion. Industry projections estimate consumption will surpass $100 billion by 2030, underscoring the urgency of expanding local semiconductor capabilities.
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