Science & TechnologyPriority2025-08-12

Cabinet Approves Four New Semiconductor Manufacturing Plants

Why focus: India Semiconductor Mission expansion — sets up 'Match-the-Following' for compound fab locations (Odisha) under Atmanirbhar Bharat push.

In News

What Happened

On August 12, 2025, the Union Cabinet approved four new semiconductor manufacturing projects under the India Semiconductor Mission (ISM) with an investment of approximately INR 4,600 crore. These include a Silicon Carbide (SiC) fab and an advanced packaging unit in Odisha, a packaging facility in Andhra Pradesh, and a discrete semiconductor expansion in Punjab. This brings the total number of approved ISM projects to ten.

Why It Matters

This expansion moves India beyond basic silicon assembly into specialized, high-growth areas like compound semiconductors and 3D heterogeneous integration. It strengthens domestic supply chains for critical sectors like electric vehicles, renewable energy, and defense, significantly reducing reliance on global chip imports.

Background

History & Context

The India Semiconductor Mission (ISM) was launched in December 2021 with an initial outlay of Rs 76,000 crore to build a comprehensive ecosystem encompassing fabs, OSATs, and design. Prior to this August 2025 announcement, six projects had been approved, including a Micron ATMP in Gujarat and Tata Electronics facilities in Dholera and Morigaon. However, India still lacked commercial compound semiconductor fabrication and advanced 3D packaging capabilities. Recognizing the growing global demand for power electronics and high-performance computing, the ISM nodal agency and the Ministry of Electronics and IT evaluated and recommended these four specialized projects to diversify the geographical and technological footprint of India's semiconductor ecosystem.

What Changed

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Introduction of Commercial Compound Fabs: BEFORE, India had no commercial compound semiconductor fabrication. NOW, SiCSem (in partnership with UK's Clas-SiC Wafer Fab) is establishing India's first commercial Silicon Carbide (SiC) fab in Bhubaneswar, Odisha.
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Advanced Glass Substrate Packaging: BEFORE, approved packaging units focused on standard ATMP/OSAT processes. NOW, 3D Glass Solutions (3DGS) is setting up an embedded glass substrate unit for 3D Heterogeneous Integration (3DHI) modules in Odisha.
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Geographical Diversification: BEFORE, ISM manufacturing projects were concentrated heavily in Gujarat and Assam. NOW, the ecosystem expands significantly to Odisha (SiCSem, 3DGS), Punjab (CDIL), and Andhra Pradesh (ASIP Technologies).
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Total Approved Projects: BEFORE, the ISM had 6 active approved projects. NOW, the total count has increased to 10 projects, bringing the cumulative ecosystem investments to roughly Rs 1.60 lakh crore.
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Discrete Semiconductor Capacity: BEFORE, discrete high-power component manufacturing lacked massive scale. NOW, Continental Device India Limited (CDIL) is expanding its Mohali plant in Punjab to manufacture over 158 million high-power discrete devices annually.

What Did NOT Change

Despite this major expansion, the approved projects still do not include cutting-edge logic foundries (such as 2-nanometer or 3-nanometer node fabs), which remain concentrated in Taiwan and South Korea. The mission's primary strategy continues to focus on mature nodes, specialty compound chips, and assembly/packaging, which are structurally more feasible entry points for India's current industrial base.

Prelims Angle

NCERT Connection

Class 12 Physics Chapter 14 - Semiconductor Electronics: Materials, Devices and Simple Circuits. This chapter introduces intrinsic and extrinsic semiconductors and the concept of the 'energy bandgap' (Eg). Standard silicon has a bandgap of about 1.1 eV. The newly approved SiCSem project manufactures Silicon Carbide (SiC), a compound semiconductor with a wide bandgap of about 3.3 eV. This wide bandgap prevents thermal runaway at high temperatures, explaining why the SiC fab is critical for heavy-duty, high-voltage applications like electric vehicles and solar power inverters.

Common Misconceptions

✗ India is now setting up fabrication plants for the most advanced 2-nanometer chips found in modern smartphones.

✓ The newly approved fabs and OSATs focus on mature technology nodes (28nm and above), specialty compound semiconductors (like Silicon Carbide), and advanced packaging, not cutting-edge sub-5nm logic chips.

Media headlines often use the generic term 'advanced semiconductors' to describe both cutting-edge logic nodes and advanced packaging/compound technologies, leading to public confusion about the exact type of chips being manufactured.

✗ Silicon Carbide (SiC) is just a brand name for a standard silicon chip.

✓ Silicon Carbide is a distinct 'compound semiconductor' made of silicon and carbon. It possesses entirely different electrical and thermal properties than pure silicon.

Because it contains the word 'Silicon', laypersons assume it is identical to the traditional silicon wafers that have dominated the computing industry for decades.

Practice Questions

Q1

How Many Correct

Consider the following statements regarding the semiconductor manufacturing projects approved under the India Semiconductor Mission (ISM) in August 2025: 1. SiCSem is establishing India's first commercial Silicon Carbide (SiC) compound fabrication facility in Odisha. 2. The ISM funding exclusively targets the establishment of cutting-edge 2-nanometer and 3-nanometer logic foundries. 3. 3D Glass Solutions is setting up a facility in Andhra Pradesh utilizing 3D Heterogeneous Integration (3DHI) technology. How many of the above statements are correct?

Q2

Match the Following

Match the newly approved semiconductor companies (List I) with their primary technological focus or location (List II). List I: A. SiCSem B. 3D Glass Solutions C. CDIL D. ASIP Technologies List II: 1. Expansion of discrete semiconductor manufacturing in Punjab 2. ATMP facility established in Andhra Pradesh in partnership with a South Korean firm 3. Embedded glass substrate and 3DHI packaging in Odisha 4. India's first commercial Silicon Carbide (SiC) fab in Odisha

Q3

Assertion & Reason

Assertion (A): Silicon Carbide (SiC) semiconductors are preferred over traditional pure silicon semiconductors for high-power applications such as electric vehicles and solar inverters. Reason (R): Silicon Carbide possesses a wider energy bandgap and higher thermal conductivity compared to standard silicon. Select the correct answer from the codes given below:

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