Semiconductor fabs in India are the chip factories that India is now building, led by the first commercial fab at Dholera in Gujarat. A fab, short for fabrication plant, is a factory that prints chips onto silicon wafers. India has designed chips for decades, in Bengaluru, Hyderabad and Noida. But almost every chip used in the country has been made abroad.
Why is India building fabs now? A fab costs so much that no country gets one without government support. In 2021, the government set up the India Semiconductor Mission (ISM). Under it, the central government pays about half the project cost of an approved fab or assembly plant, and state governments add further support. India wants a supply of chips at home, for its own phones, cars, power grids and defence.
The Dholera fab is being built by Tata Electronics with Powerchip Semiconductor Manufacturing Corporation (PSMC) of Taiwan, which supplies the manufacturing technology. The investment is about ₹91,000 crore. At full capacity, the fab is planned to start about 50,000 wafers a month. A wafer is a thin disc of silicon, here 300 millimetres across. The fab will make chips on mature processes, from 28 nm to 110 nm. A process is a fixed recipe for one generation of chip, and "nm", for nanometre, is the name of the generation rather than a measured size. These are not the newest processes, which are run in Taiwan, South Korea and the United States. They are the ones used for most chips in daily life: microcontrollers, power-management chips, display drivers and chips for cars.
Imagine a wafer started at Dholera, carrying 3,000 copies of a microcontroller for washing machines. A microcontroller is a small computer on one chip, and each copy on the wafer is called a die. Over about three months, the wafer goes through several hundred steps in the clean room. Layers are laid down, patterned with light, etched and inspected, again and again. At the end, probes test every die. Say 2,800 of them work. That is a yield of about 93%, the share of chips that work, which decides whether a fab makes money. The wafer then goes to an assembly plant, where the dies are cut apart, packaged and tested again.
That second step is coming up in India too. An OSAT (chip assembly and test) plant cuts the wafer, seals each die in a package and tests it. Micron Technology is building a plant at Sanand in Gujarat to assemble and test memory chips. Tata Electronics is building one at Jagiroad in Assam, and other companies are building plants in Gujarat. India already has one government fab, the Semi-Conductor Laboratory at Mohali in Punjab. It makes small numbers of chips for space and defence, on much older processes.
A fab also needs supplies that India has not made at scale: ultra-pure water, gases, speciality chemicals, and engineers who have run a fab before. Building these up will take years. Dholera will work as a semiconductor foundry: it will make chips to other companies' designs, including designs from India's own design centres.