India Semiconductor Mission, Tata ink fiscal pact for Gujarat chip plant

The Centre through the India Semiconductor Mission, has committed 50 per cent fiscal support on a pari-passu basis for eligible project costs

Government semiconductor body ISM and Tata Group firms - Tata Electronics and Tata Semiconductor Manufacturing - have signed fiscal support agreement for the Gujarat unit, an official statement said on Wednesday.

Tata Electronics has committed to investing over Rs 91,000 crore to set up a semiconductor fab in the Dholera (SIR) with a capacity of 50,000 wafers starts per month (WSPM).

The Centre through the India Semiconductor Mission, has committed 50 per cent fiscal support on a pari-passu basis for eligible project costs.

"India Mission (ISM), Tata Electronics Private Limited (TEPL), and Tata Semiconductor Manufacturing Private Limited (TSMPL) have signed a Fiscal Support Agreement (FSA) in the presence of Chief Minister of Gujarat Shri Bhupendra Patel for India's first commercial semiconductor fab in Dholera, Gujarat," the statement said.

The cabinet had approved Tata's investment proposal in February last year. Tata's semiconductors fab is expected to generate over 20,000 direct and indirect skilled jobs.

The company has partnered with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC) for the plant.

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.

"This initiative underscores India's ambitions in indigenous semiconductor manufacturing. 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," Sushil Pal, CEO of the India Semiconductor Mission said.

"The Fiscal Support Agreement (FSA) solidifies our partnership with MeitY and ISM to realise our Hon'ble Prime Minister's vision of manufacturing 'Chips for Viksit Bharat'," Tata Electronics, CEO and MD, Randhir Thakur said.