The Union Cabinet has recently approved a joint venture between HCL and Foxconn to establish a semiconductor chip assembly and packaging unit near Jewar airport in Uttar Pradesh. This project is the sixth to receive approval under the government’s ambitious India Semiconductor Mission, which is backed by a budget of Rs 76,000 crore aimed at boosting domestic semiconductor manufacturing. The Jewar plant is planned to manufacture 20,000 wafers per month with an output capacity of 36 million units monthly. It will focus on producing display driver chips used in devices such as mobile phones, laptops, automobiles, PCs, and other electronics with display screens.

The total investment for the project is estimated at Rs 3,706 crore, out of which approximately Rs 1,500 crore will come from the government as incentives under the chip manufacturing scheme. This financial support forms a crucial part of the government’s strategy to attract large-scale investments in semiconductor manufacturing and build a robust supply chain within India.

This venture marks Foxconn’s second attempt to enter India’s chip production sector. Previously, in 2022, Foxconn had applied to build a semiconductor manufacturing plant jointly with Vedanta. However, that collaboration fell apart in 2023 due to the inability of the two partners to find a viable technology partner, compounded by Vedanta’s heavy debt burden, which impeded its capacity to invest in acquiring the necessary chipmaking technology.

The Jewar plant will be set up near the Yamuna Expressway Industrial Development Authority, close to Jewar airport. It is the first chip manufacturing facility to be established in Uttar Pradesh under the India Semiconductor Mission. Meanwhile, other semiconductor projects are progressing in different parts of India. Gujarat is currently home to four plants, including a fabrication unit (fab) and three assembly units, while Assam is developing an assembly and packaging plant.

Union IT Minister Ashwini Vaishnaw stated that the Jewar plant is expected to commence chip production by 2027. The facility aims to fulfill about 40% of India’s domestic demand for these types of chips, with the remainder expected to be used by Foxconn in its manufacturing operations abroad. Foxconn, known for assembling Apple iPhones in India, is seen as a key player in the country’s semiconductor ambitions.

The India Semiconductor Mission has successfully attracted significant foreign and domestic investments so far. The total investment under the first phase of the mission has reached approximately $18 billion. Key projects include the Tata-PSMC fab, which is under construction at an estimated cost of $11 billion, alongside assembly and testing plants by notable companies such as US-based Micron Technology, the Tata Group, Murugappa Group’s CG Power in partnership with Japan’s Renesas, and Kaynes Semicon.

These projects are currently in advanced stages of construction, with the first made-in-India semiconductor chips expected to be produced by the end of the current year. The government’s focused efforts through the India Semiconductor Mission highlight its commitment to making India a major hub for semiconductor manufacturing and reducing dependency on imports. The joint venture between HCL and Foxconn further strengthens this vision by contributing to the creation of a local semiconductor ecosystem and generating employment opportunities.

In summary, the Jewar chip assembly and packaging plant represents a significant step in India’s journey towards self-reliance in semiconductor manufacturing, supported by large investments, government incentives, and a growing network of domestic and international collaborators.