Indian state approves chip, EV manufacturing plants

The Maharashtra state cabinet in India has approved three foreign investment manufacturing projects — a $1bn semiconductor plant and two battery electric vehicle (EV) and hybrid vehicle factories.

The semiconductor chip plant, a joint venture between Israel-based Tower Semiconductor and Indian industrial conglomerate Adani Group, is planned to be built in two phases. The 587.63bn rupees ($7bn) first phase will have a production capacity of 40,000 wafers/month and the Rs251.84bn second phase will add another 40,000 wafers/month, the state's deputy chief minister, Devendra Fadnavis, announced.

The facility, to be located outside Mumbai, will be the second semiconductor fabrication plant in the country. The project still needs approval from the central government and Ministry of Electronics and IT, which plans to revise its semiconductor incentives.

The project is designed to capitalise on the Indian government's plans to establish a domestic semiconductor manufacturing supply chain, driven by strong local demand in the electronics, EV and manufacturing sectors.

Earlier this week, the Indian cabinet approved a proposal from Kaynes Semicon to set up a chip assembly, testing and packaging plant in Gujarat. The Rs33bn plant will have a capacity to handle 6mn chips/d.

The governments of India and Singapore on Thursday signed an agreement to co-operate on semiconductor industry development and supply chain resilience, with an eye to Singaporean companies investing in Indian production.

The two automotive plants that were also approved by Maharashtra state will be built by Skoda Auto Volkswagen India and Toyota Kirloskar, which is a joint venture between Japan's Toyota Motor and local firm Kirloskar Systems.

The Rs150bn Skoda facility in the city of Pune will produce battery electric and hybrid cars. The company already has plants in Pune and Chhatrapati Sambhaji Nagar (previously named Aurangabad), which produce 180,000 cars and 60,000 cars, respectively.

The Rs212.73bn Toyota plant will be built in Chhatrapati Sambhaji Nagar and will manufacture battery EVs, hybrids, plug-in hybrids and fuel cell vehicles. The announcement comes after the company signed an initial agreement with the Government of Maharashtra in July to explore setting up a new manufacturing plant in the city.

The company operates two automotive plants in Bidadi in the state of Karnataka with an annual installed capacity of 3.42mn vehicles/yr and plans to build a third plant in the town to start operations in 2026 with a capacity of 1mn units/yr.

The new plants reflect Toyota Kirloskar's growing product portfolio at it expands into EV manufacturing, rising consumer demand and an increase in exports, the company said.

By Nicole Willing