MeitY aims to upgrade the facility to industry-standard legacy nodes of 65 and 40 nm initially, before advancing to more cutting-edge nodes.
Since September 2023, the Indian government has received nine bids from major companies, including the Tata Group, Tower Semiconductors, and Texas Instruments, for the modernization of its Semi-Conductor Laboratory (SCL) in Mohali. The government plans to invest around $1 billion in the 48-year-old facility, which is the only chip manufacturing unit in India that produces semiconductors for strategic and defence purposes, including for space missions like the Chandrayaan.
The financial bids will be invited from these companies once the government decides the nodes that the facility will manufacture. The selected firm may need to collaborate with a technology firm that possesses licensing-grade semiconductor technology.
The 180 nm node size chips that the facility produces right now have limited applications. The Ministry of Electronics and Information Technology (MeitY) aims to upgrade the facility to industry-standard legacy nodes of 65 and 40 nm initially, before advancing to more cutting-edge nodes.
This modernisation effort is part of the government’s broader $10 billion semiconductor incentive package, aimed at establishing a semiconductor chip fabrication ecosystem in India. The government is hopeful for more bids, especially from domestic companies, given the national importance of the work.
We are evaluating the current bids including from the Tata Group. A couple of companies working in the defence space have also shown interest,” said one of the officials.
The Tata Group has been actively preparing to enter the chip manufacturing sector in India, with its chairman N Chandrasekaran recently announcing plans to set up a chip manufacturing unit at Dholera. Tower Semiconductor, which assisted the government in planning the 180 nm chip plant at SCL, is also eager to enter India’s commercial chip manufacturing segment. Texas Instruments, known for its significant chip research and development operations in the country.
The bidder needs to transform the facility into a R&D centre, an at-scale manufacturing facility or a combination of both, ensuring end-to-end setup and operationalisation of the R&D fab. This includes technology transfer, material and equipment supplies, installation, operational testing, commissioning, skilling of operational manpower, and periodic maintenance. SCL will continue to meet the semiconductor chip demands of government agencies like the Indian Space Research Organisation.
SCL’s primary focus has been on R&D and not commercial chip production, while experts like Satya Gupta, CEO of the Epic Foundation, suggest that the facility could benefit from some commercial focus. He proposes a revenue target of $50 million in five years, with 80% coming from commercial operations and the rest from strategic sector products.
