Tata, Texas Instruments, Tower among bidders for Mohali's Semiconductor Lab revamp: Report

The government has reportedly received nine bids from companies, including the Tata Group, Tower Semiconductor, and Texas Instruments, for the overhaul of its Semiconductor Laboratory (SCL) in Mohali. 

According to a report by The Economic Times (ET) on Wednesday, citing sources familiar with the matter, the bidders include the Tata Group, US-based Texas Instruments, and Israel's Tower Semiconductor.

Established in 1976, SCL Mohali began chip manufacturing in 1984. It is the only chip manufacturing unit in India that produces chips for defense and strategic purposes. However, the facility has fallen behind private companies in terms of production and technology over the years. To address this, the government allocated $1 billion for the modernization of the facility and invited expressions of interest from the industry in September last year. The $1 billion fund is part of the government's $10 billion semiconductor incentive package to establish a semiconductor chip fabrication ecosystem in the country.
In May, the government announced plans to establish the India Semiconductor Research Institute, which will serve as a center of excellence and collaborate with institutes like IIT Delhi, IIT Chennai, and others in a hub-and-spoke model.

In September 2023, the Ministry of Electronics and IT invited bids for the modernization of the Mohali facility, either by transforming it into a research and development center of excellence, an at-scale manufacturing facility, or a combination of both.

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The ministry stated in the bid document that SCL would continue to meet the semiconductor chip demand of government agencies such as the Indian Space Research Organization. The bidder would also be responsible for the end-to-end setup and operationalization of the R&D fab, including technology transfer, material and equipment supplies, installation, operational testing, commissioning, onsite and offsite skilling of operational manpower, and periodic maintenance.

Currently, the government-run Mohali facility produces chips of 180 nm node size, which have limited use cases. The Ministry of Electronics and Information Technology (MeitY) officials aim to bring the facility's technology on par with industry standards of legacy nodes of 65 and 40 nm before targeting more cutting-edge nodes.

This development coincides with the Tata Group's plans to set up a semiconductor manufacturing unit at Dholera soon. The commissioning of the unit is expected to start this year.

Tower Semiconductors is also eager to enter commercial chip manufacturing in India. The Tata Group has been preparing to enter the chip manufacturing segment in India for the past few years. Its chairman, N Chandrasekaran, announced earlier this month that the group will soon establish a chip manufacturing unit at Dholera.

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Israel's Tower Semiconductor has a close association with SCL as it helped the Indian government plan the 180 nanometers chip plant. Tower Semiconductor is also actively discussing entering the commercial chip manufacturing segment in India, while Texas Instruments has significant chip research and development operations in the country and was among the first to start R&D here.

India is strategically positioning itself as a global semiconductor hub, driven by government initiatives, high-level industry engagements, and a focus on transformative technologies, despite challenges in supply chain management and ecosystem development. According to estimates by Invest India, the Indian semiconductor market was valued at approximately $23.2 billion and is projected to reach $80.3 billion by 2028, with a compound annual growth rate (CAGR) of 17.10% during the forecast period.