Nine bidders, including Tata, Texas, and Tower, have submitted proposals for the overhaul of the Semiconductor Laboratory (SCL) in Mohali, according to sources familiar with the matter.
The SCL, a state-owned facility, is the sole chip manufacturing unit in India producing semiconductors for strategic and defense purposes, including applications in space exploration such as the Chandrayaan mission. A senior government official emphasized the strategic importance of modernizing the SCL, expressing a preference for a local firm to undertake the mandate due to the national significance of the work involved.
The Tata Group has expressed interest in entering the chip manufacturing segment in India, with plans to establish a chip manufacturing unit in Dholera. Tower Semiconductor from Israel has played a pivotal role in planning SCL’s 180-nanometer chip plant, while also expressing eagerness to enter India’s commercial chip manufacturing segment. Texas Instruments, with significant chip research and development operations in the country, is actively engaged in discussions with the government.
Once the government determines the specific nodes for facility manufacturing, financial bids will be invited from these companies. The selected firm may need to partner with a technology firm possessing licensing-grade semiconductor technology.
Currently, the Mohali facility produces chips with a 180 nm node size, with plans to align technology with industry standards of 65 and 40 nm initially, before progressing to more advanced nodes. The government allocated $1 billion for the modernization of the facility and invited expressions of interest from the industry in September last year.
Officials are optimistic about receiving more bids, especially from domestic companies, citing the crucial national importance of the work. The government is evaluating the current bids, including those from the Tata Group, and interest from companies in the defense sector.
SCL, established in 1976 as Semiconductor Complex Limited, was envisioned to advance India’s semiconductor manufacturing ambitions. However, it has lagged behind private companies in production and technology. The modernization fund aims to address this gap and enhance the facility’s capabilities.
Epic Foundation’s CEO, Satya Gupta, suggested that SCL could benefit from a commercial focus, emphasizing the need for definite commercial and strategic goals, including revenue generation targets. In September 2023, the Ministry of Electronics and IT invited bids for the modernization of the Mohali facility, allowing for its transformation into a research and development center of excellence, an at-scale manufacturing facility, or a combination of both. The bidder is expected to fulfill the semiconductor chip demand of government agencies, including the Indian Space Research Organisation, and oversee the end-to-end setup and operationalization of the R&D fab, technology transfer, material and equipment supplies, skilling, and maintenance.