TSMC Declines India’s Invitation to Set Up Semiconductor Plant, Impacting Chipmaking Ambitions. The world’s biggest chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC), has declined the invitation offered by India to set up a semiconductor plant. The reason why they did this is still not clear. Not only India, but TSMC has also rejected the offers from Qatar and Singapore. To know more about the topic “TSMC Declines India’s Invitation to Set Up Semiconductor Plant, Impacting Chipmaking Ambitions,” read the complete article.
TSMC Declines India’s Invitation to Set Up Semiconductor Plant, Impacting Chipmaking Ambitions
According to a report from Digitimes, the world’s biggest chipmaker company, Taiwan Semiconductor Manufacturing Company (TSMC), has rejected the invitation sent by India to set up a semiconductor plant in India. The report added that Taiwan remains the country’s ideal production base, and its factories in the United States, Japan, and Germany were built due to “huge pressure” from major powers. However, the expansion was also made possible because of the countries’ strength in the semiconductor industry supply chain.
Following TSMC’s rejection, India turned to Powerchip Semiconductor Manufacturing Corporation (PSMC), which inked a deal with Tata Electronics. Under the deal, PSMC will only be responsible for the design and construction of a water manufacturing plant and the training of employees. Subsequent operations will be the responsibility of the Tata Group. India has continued to progress on its ambition to become a chip manufacturing powerhouse, with six chip fabrications approved so far. The latest in a joint venture between HCL and Foxconn in Uttar Pradesh. Five additional facilities are in advanced construction stages, and major players like Tata Electronics, in partnership with Taiwan’s PSMC, are investing heavily in new fabs in Gujarat, aiming to produce up to 50,000 wafers per month by 2026.
India Semiconductor Mission (ISM)
According to various news reports published by India Semiconductor Mission (ISM) on March 5, 2025, a central government body has signed a financial support agreement with Tata Electronics and Tata Semiconductor Manufacturing for establishing a semiconductor facility in Dholera, Gujarat. Tata electronics will invest over INR 910 billion (US $10.44 billion) to establish a semiconductor facility in Dholera’s Special Investment Region (SIR) with a production capacity of 50,000 wafers per month.
The central government, through ISM, will provide 50 percent financial support for eligible project costs. The project, approved by the union cabinet in February 2024, is expected to create over 20,000 direct and indirect skilled jobs within the country. Tata has partners with Taiwan’s Powerchip Semiconductor Manufacturing Corporation for the plant, which will cater to global markets in automotive, computing, communications, and AI sectors.
Analytics Indiam (AIM)
Analytics Indiam (AIM) has posted, “Despite Middle Eastern nations expressing strong ambitions to develop large-scale AI and chip infrastructure, TSMC’s reluctance stems from the lack of a mature semiconductor ecosystem in those regions. However, DigiTimes noted that opportunities in the Middle East are “not completely off the table,” especially given TSMC’s monetary capability to invest globally. Meanwhile, India is making quiet strides in chip design. Union Minister Ashwini Vaishnaw announced the establishment of India’s first chip design centers in Noida and Bengaluru.
The centers, led by the India unit of Renesas Electronics, aim to develop an end-to-end 3-nanometer chip—marking a major leap forward in India’s semiconductor journey. TSMC, meanwhile, is doubling down on its The US presence, expanding its investment from $100 billion to $165 billion to support three fabrication plants, advanced packaging units, and a major R&D center in Arizona. The move cements TSMC’s role as a cornerstone for tech giants like AMD, NVIDIA, and Apple.
Possible Reasons for TSMC’s Decline
The Digitimes-sourced reports show that TSMC did not disclose any specific reasons for declining the invitation. However, the reasons may be
Lack of Mature Infrastructure: TSMC needs mature infrastructure where the materials are always available and there is no shortage of anything. But despite developing more than before, India may not be able to obtain available raw materials like silicon wafers, high-purity gases, and specialty chemicals.
Geopolitical Factors: The reason why TSMC has expanded to the The US, Japan, and Germany can be due to geopolitical factors and pressure from major global diverse powers to expand the chip manufacturing away from Asia.
High Setup Costs and Risks: Every business comes with risks and high costs, which, according to TSMC, India is not ready for. building and managing a semiconductor plant is far more difficult than one can imagine.
