New microchip plant to be set up in UP by HCL-Foxconn JV

In a major boost to India’s ambitions of becoming a global semiconductor manufacturing hub at a time when major players in the segment are involved in what is often called chip wars, the Union Cabinet on Wednesday approved the establishment of a sixth semiconductor fabrication unit under the India Semiconductor Mission.

The new facility will be developed near Jewar Airport in Uttar Pradesh by a joint venture between Indian IT major HCL and Taiwanese electronics giant Foxconn.

The project marks another step forward in the country’s efforts to build a resilient, self-reliant semiconductor ecosystem, as envisioned under the Atmanirbhar Bharat initiative, said a government statement. The upcoming plant will focus on the production of display driver chips, which are essential components in a wide range of digital devices, including smartphones, laptops, personal computers, automobiles, and medical equipment, it added.

The facility is expected to handle a capacity of 20,000 wafers per month, with an estimated output of 36 million display driver chips per month. The venture represents an investment of ?3,700 crore, the statement said.

India’s semiconductor ambitions have been gaining traction, with five fabrication units already under construction across the country. Several global technology firms, including equipment manufacturers Applied Materials and Lam Research, have established or expanded their presence in India in recent years. Key suppliers such as Merck, Linde, Air Liquide, and Inox are also aligning operations to support the growing domestic demand, according to the statement.

The Cabinet announcement also highlights the increasing national footprint of chip design and innovation. More than 270 academic institutions and 70 startups are currently engaged in developing advanced chip design technologies in India, the statement noted. The Semiconductor Laboratory (SCL) in Mohali has successfully “taped out” 20 products designed by student teams, reflecting growing indigenous capability.

With demand for semiconductors rising alongside India’s rapidly expanding electronics manufacturing sector, covering smartphones, servers, medical devices, defence equipment, and consumer electronics, the new unit is expected to strengthen the country’s position in the global value chain.

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