Tata-Micron Partnership Receives Initial Funding Under Government’s Semiconductor Programme

The Indian government has started disbursing funding to Tata Group and Micron Technology under the semiconductor manufacturing programme, marking a step forward in the country's ambitious attempts to strengthen its semiconductor ecosystem. 

A PLI initiative of Rs 76,000 crore was introduced in 2021 by the government of Prime Minister Narendra Modi as part of the redesigned roadmap for the semiconductor and display fab ecosystem. To attract high-end investors, the plan was changed in September 2022 to give 50 per cent consistent assistance across technological nodes.  In the past, the program provided between 30 and 50 per cent of funding in a number of areas to boost the growth of India's semiconductor and display manufacturing industries.

For the establishment of semiconductors, display fabs and other categories such compound semiconductors, the financial support is provided on a pari-passu (equal footing) basis. The government's help will be distributed equally among the recipient enterprises depending on their quarterly expenditures. Under the revised assembly, testing, marking and packaging plan, each of the two businesses would get 50 per cent of the setup costs on a quarterly basis. 

At the Indian government's invitation, American chip manufacturer Micron Technology promised to invest a total of $2.75 billion in Gujarat's Sanand facility by June 2023, including incentives for chip packaging for the automotive industry, smartphones, data centres and Internet of Things (IoT) devices. And Micron is reportedly to be able to produce these goods by December 2025 with the initiation of its pilot facility.

This effort, which is part of India's wider semiconductor strategy, intends to encourage significant investment in the industry by providing financial assistance and incentives to both global and indigenous chip producers. Tata-Micron's joint venture, which was approved earlier this year, is poised to receive an initial dividend under the scheme's conditions. This action is consistent with India's objective to strengthen domestic semiconductor manufacturing capabilities and lessen reliance on foreign supply.

The funds are disbursed to Tata-Micron after a thorough review procedure to ensure that the project fits the tough standards outlined in the semiconductor program. This move is likely to hasten the development of semiconductor infrastructure in India and benefit the whole tech industry. With the initial payout beginning, Tata-Micron's collaboration represents a hopeful step forward in India's drive to become a semiconductor hub.