Tata Electronics has officially started building India’s first semiconductor fabrication unit at Dholera, near Ahmedabad in Gujarat. This ambitious project, valued at ₹91,000 crore, is being developed in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC). The plant is expected to roll out its first batch of chips by December 2026, marking a turning point in India’s journey towards technological self-reliance.
What is a Semiconductor and Why Does India Need a Fab?
A semiconductor is a material—typically silicon—that can conduct electricity under certain conditions and is used to make microchips. These chips are the heart of all modern electronic devices, from smartphones and laptops to cars and industrial machines. India, until now, has relied almost entirely on imports for semiconductors, making its industries vulnerable to global supply disruptions and price fluctuations.
The recent global chip shortage exposed the risks of this dependence, affecting Indian manufacturers across sectors. By building its own semiconductor fab, India aims to secure a stable supply of chips, reduce import bills, and support its growing electronics, automotive, and defence industries. This move aligns with the government’s “Atmanirbhar Bharat” vision, aiming to make India a global hub for electronics manufacturing.
Economic Impact and Benefits
The Dholera fab will have the capacity to produce up to 50,000 wafers per month, catering to sectors like automotive, computing, communications, and artificial intelligence. The project is expected to generate more than 20,000 direct and indirect skilled jobs, creating opportunities for engineers, technicians, and support staff. Tata Electronics’ facility will anchor a broader semiconductor ecosystem in the region, potentially leading to over 1 lakh jobs as the supply chain and ancillary industries develop.
Local chip production will help Indian manufacturers access reliable and affordable semiconductors, making Indian products more competitive globally. It will also attract further foreign investment and foster innovation, as startups and MSMEs gain easier access to advanced technology.
Government Support and Provisions
The Indian government, through the India Semiconductor Mission (ISM), has committed to providing 50% fiscal support for eligible project costs, significantly reducing the financial burden on Tata Electronics. The Gujarat government is also playing a crucial role by facilitating the construction of 1,500 residential units for Tata staff, suppliers, and expatriates in Dholera, ensuring that skilled professionals have quality housing near the plant.
The Dholera Special Investment Region offers robust infrastructure, including reliable power, ultra-pure water, expressway connectivity, and proximity to the upcoming Dholera International Airport. The state’s semiconductor policy provides incentives like a 40% capital-expenditure subsidy and land support, making it attractive for high-tech manufacturing.
In addition to the Gujarat fab, Tata Electronics is expanding with a semiconductor assembly-and-test facility in Assam, further strengthening India’s semiconductor ecosystem.
India’s first semiconductor fabrication unit by Tata Electronics is a historic step. It will not only make India self-reliant in a critical technology sector but also drive economic growth, create jobs, and help the country emerge as a key player in the global technology landscape.
