A city planned to serve as a semiconductor manufacturing hub in India is taking shape with the arrival of companies and investments.
The Dholera Special Investment Zone, where the project known as Semicon City is located, is located a two-hour drive from Ahmedabad, the largest city in Gujarat. The website is being developed by a special purpose entity set up by the Central and State Governments.
The first phase of Dholera development began in 2016, covering an area of 22.5 square kilometres. Ultimately, the total area will be 920 square kilometers, making it larger than Singapore.
The construction of some roads, water supply facilities and power substations has already been completed. Plans include building housing, commercial facilities, medical centers and schools.
One day, Dholera will be home to two million people, said Anurag Tamhankar, assistant director of marketing and promotion at Dholera Industrial City Development Corporation, a special purpose entity.
Tata Electronics, the semiconductor company of the Tata Group, will play a prominent role in the ‘Semiconductor City’. The company will invest up to 910 billion rupees ($10 billion) to build India’s first front-end semiconductor factory, a facility that forms circuits on chips (silicon chips).
Tata Electronics has entered into a partnership with Powerchip Semiconductor Manufacturing Corp. (PSMC), a major foundry company based in Taiwan, to receive production technology support.
The factory, which is currently under construction, will have the capacity to produce 50,000 chips per month and will employ more than 20,000 people. Operations are expected to begin within two to three years. The facility will serve as a nerve center for India’s chip supply chain, including companies that produce equipment and materials needed to manufacture semiconductors.
The Indian government has approved the construction of 10 new factories for domestic and foreign semiconductor manufacturers across the country. Total public and private investments amount to 1.6 trillion rupees.
India’s ambitions in the semiconductor sector represent an opportunity not only for American and European interests, but also for Japanese companies. Semiconductor tool maker Tokyo Electron is cooperating with Tata in employee training and other areas, and plans to open a support center in the Dholera Investment Park to install and maintain chipmaking equipment.
Japanese technology group Fujifilm intends to invest several billion yen to start building a factory to manufacture chip materials in the next fiscal year, including chemicals used to remove impurities.
The increasing number of Japanese people living in India is generating demand to meet their daily needs. AJU Group, which caters to this population, opened a Japanese restaurant in Dholera in July.
The hotel is scheduled to open next year. Company director Prakash Yadav said AJU seeks to meet the food and accommodation needs of Japanese expatriates.