According to reports, the government has received nine proposals for the $1 billion renovation of its Semiconductor Laboratory (SCL) in Mohali, including those from the Tata Group, Tower Semiconductor, and Texas Instruments.

What Happened: According to a senior government official cited in the Economic Times, the government is eager to use a local firm for this nationwide operation, as the modernization of SCL holds strategic importance.

The state-owned facility is India's only chip manufacturing facility that creates semiconductors for defense and strategic uses, including space exploration projects like the Chandrayaan expedition.

With Chairman N Chandrasekaran announcing plans to establish a chip manufacturing unit in Dholera, the Tata Group has been preparing to enter the Indian chip manufacturing market. In the past, SCL and Israel's Tower Semiconductor have worked closely together to plan the 180-nanometer chip factory. According to reports, the business is keen to join India's commercial chip manufacturing market. Texas Instruments, a US-based company, also maintains sizable research and development facilities in the nation.

Financial proposals from these businesses will be welcomed once the government determines the precise industrial nodes, the government source told Business Daily. The selected company might have to collaborate with a technological company that has semiconductor technology suitable for licensing.

The objective is to align the technology of the government-run Mohali facility, which presently makes chips with a node size of 180 nanometers, with industry norms for legacy nodes measuring 40 and 65 nanometers. The government's $10 billion semiconductor incentive package, which includes the $1 billion set aside for modernization, aims to create an environment in the nation for the manufacture of semiconductor chips.

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