Why India’s Sixth Semiconductor Unit in UP Holds the Key Now
India’s semiconductor journey, once seen as a distant ambition, is now picking up serious momentum. With strategic policy support, rising domestic demand, and global supply chain realignments, the country is positioning itself as an emerging hub in the global chipmaking ecosystem. From chip design innovations in academic institutions to infrastructure investments by global majors, the chip manufacturing ecosystem is taking shape. It promises to power everything from smartphones and electric vehicles to defence systems and next-gen computing. Against this backdrop, the announcement of a sixth semiconductor unit under the India Semiconductor Mission (ISM) aims to bolster the country’s strategic capabilities in electronics manufacturing. It signals progress and a deeper commitment to self-reliance in this critical technology sector. The Union cabinet, chaired by Prime Minister Narendra Modi, has approved the establishment of a new semiconductor manufacturing unit in Uttar Pradesh. The plant, to be located near Jewar airport in the Yamuna Expressway Industrial Development Authority (YEIDA) area, will be developed through a joint venture between HCL and Foxconn. India's 6th semiconductor unit approved!📍Jewar, Uttar Pradesh✅ To manufacture display driver chips✅ Capacity: 20,000 wafers/ month; 36 million chips/ month#CabinetDecision pic.twitter.com/wLK0CnceLl— Ashwini Vaishnaw (@AshwiniVaishnaw) May 14, 2025 The new facility will produce display driver chips for mobile phones, laptops, PCs, automobiles and other display-based devices. The plant is expected to handle 20,000 wafers monthly and deliver an output capacity of 36 million units per month, as per the announcement. The venture will also attract an investment of ₹3,700 crore. The ISM continues to gain momentum, aligning with the government’s vision of a self-reliant manufacturing or Atmanirbhar Bharat. It also adds to the recent announcement that Renesas Electronics will build two design facilities in Noida and Bengaluru, aiming to develop end-to-end 3-nanometer chips. Ashok Chandak, president of IESA and SEMI India, said, “This isn’t just about building infrastructure, it reflects India’s growing maturity in semiconductor manufacturing, with trusted partners, strategic intent, and industrial scale.” Chandak also highlighted that the collaboration would position India as a global hub for semiconductor Outsourced Semiconductor Assembly And Test (OSAT) operations, aligning with the vision of “Make in India, Make for the World.” The Five That Came Before Before the latest project took centre stage, five major semiconductor initiatives had already laid the groundwork for India’s ambitions in the sector. Among them is Tata Electronics’ semiconductor fabrication facility in Dholera, Gujarat, a ₹91,000 crore endeavour developed in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC). The plant is designed to produce up to 50,000 wafers per month and is projected to create over 20,000 skilled jobs. Additionally, it will implement equipment made by KASTECH Equipments. Micron Technology is setting up an assembly, testing, marking, and packaging (ATMP) unit in Sanand, Gujarat. The ₹22,500 crore investment is expected to generate 5,000 direct and 15,000 indirect jobs. In the same region, CG Power and Industrial Solutions, in partnership with Renesas Electronics and Stars Microelectronics, is building an OSAT plant capable of producing 15 million chips daily for industries like automotive, consumer electronics, and 5G. Kaynes Technology’s ₹3,300 crore unit in Sanand will produce six million chips daily, catering to markets such as industrial automation, electric vehicles, telecom, and mobile devices. Rounding out the five is Tata Semiconductor Assembly and Test (TSAT), which is constructing a ₹27,000 crore facility in Jagiroad, Assam. Scheduled to become operational in 2025, the plant will drive industrialisation in India’s North Eastern Region. With these new fabs and existing ones exploring EMS components and products, Tata Electronics is building the foundations of India’s semiconductor revolution. Utpal Shah, SVP for strategy and business development at Tata Electronics, also emphasised this during the Nano Electronics Roadshow in Bengaluru this year. Why Uttar Pradesh? Jewar’s selection is strategic, given its proximity to the upcoming Noida International Airport, which will enhance global logistics. The YEIDA region offers robust infrastructure, including expressways and industrial zones, making it conducive to high-tech manufacturing. Uttar Pradesh’s Electronics Manufacturing Policy 2020 further incentivises such investments by offering benefits like interest subsidies, stamp duty exemptions and fiscal incentives. These measures aim to position the state as a hub for electronics manufacturing. The HCL-Foxconn plant is expected to bolster the local economy, generate employment, and reduce India’s reliance on imported semiconductor components. This initiative aligns with the national objective of achieving self-reliance in critical technology sectors. Additionally, across the country, academic institutions and startups are also contributing to semiconductor design. Students and entrepreneurs from 270 institutions and 70 startups are engaged in advanced technology development, with 20 products taped out by SCL Mohali. As domestic manufacturing scales up, international ecosystem partners such as Applied Materials, Lam Research, Merck, Linde, Air Liquide and Inox have expanded operations in India to support growth in this sector. The Builders HCL brings decades of hardware development expertise, while Foxconn is known globally for its electronics manufacturing. The two companies had also partnered in January 2024, marking Foxconn’s first step into setting up OSAT operations in India. The company had committed to investing significantly in the country to strengthen its domestic manufacturing capabilities, serving clients like Apple and Xiaomi. Around the same time, Foxconn expressed its eagerness to collaborate with HCL to establish OSAT operations in India, especially in Bengaluru, Karnataka. The focus was to build an ecosystem and enhance supply chain resilience for the domestic industry. The company also planned to use its “build-operate-localise” model to support local communities. Making that a reality, the Cabinet’s decision now comes amid increasing global and domestic demand for semiconductors, Trump tariff implications and the rapid expansion of sectors including power electronics, defence, medical devices and consumer electronics. With this sixth unit, the country is moving forward to develop the strategically vital semiconductor plants and hence, accelerate its position on the global semiconductor scale. [Note: The earlier version of the infographic on six semiconductor units mentioned it as semiconductor Fabs. This has been corrected.]
The plant is expected to handle 20,000 wafers monthly and deliver an output capacity of 36 million units monthly.
The plant is expected to handle 20,000 wafers monthly and deliver an output capacity of 36 million units monthly.
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