The Indian government has given a significant boost to the country’s semiconductor industry with the approval of a ₹3,300 crore investment for a new semiconductor manufacturing plant. Kaynes Semicon Pvt Ltd will establish the facility in Sanand, Gujarat, to reinforce India’s growing presence in the global semiconductor market.

Key Points

The Union Cabinet has approved the establishment of a semiconductor unit by Kaynes Semicon Pvt Ltd in Sanand, Gujarat.

The project will see an investment of ₹3,300 crore and a production capacity of 60 lakh chips per day.

This is part of a broader government initiative to develop India’s semiconductor and electronics manufacturing ecosystem.

Three other semiconductor units have also been approved in Gujarat and Assam, attracting a combined investment of nearly ₹1.5 lakh crore.

The Rise of India’s Semiconductor Ecosystem

The Indian government’s approval of the Kaynes Semicon plant is a pivotal step in advancing the country’s semiconductor manufacturing capabilities. Located in Sanand, Gujarat, this new facility will have the capacity to produce 60 lakh chips daily, targeting a range of applications, including industrial, automotive, and consumer electronics. The initiative is part of the broader ‘Programme for Development of Semiconductors and Display Manufacturing Ecosystem,’ launched on December 21, 2021, which aims to position India as a global hub for semiconductor production.

Expanding India’s Semiconductor Infrastructure

This recent approval follows the Union Cabinet’s earlier decisions to approve the establishment of other semiconductor units across India. In June 2023, the Cabinet had given the green light to the first semiconductor plant in Sanand, Gujarat, and has since authorized the setup of three more units. These include:

Semiconductor Fab by Tata Electronics Private Limited (TEPL) and Powerchip Semiconductor Manufacturing Corp (PSMC): This unit will be built in Dholera, Gujarat, with an investment of ₹91,000 crore.

Semiconductor ATMP Unit by Tata Semiconductor Assembly and Test Pvt Ltd (TSAT): Located in Assam, this facility will see an investment of ₹27,000 crore.

Semiconductor ATMP Unit for Specialized Chips by CG Power, Renesas Electronics Corporation, and Stars Microelectronics: This unit will also be established in Sanand, Gujarat, with an investment of ₹7,600 crore.

Strengthening India’s Global Competitiveness

The combined efforts in semiconductor manufacturing are expected to bring an investment of approximately ₹1.5 lakh crore. The four semiconductor units collectively aim to produce about 7 crore chips daily, significantly enhancing India’s production capacity and global competitiveness in the semiconductor industry. The government has emphasized that the construction of these units is progressing rapidly, with a robust semiconductor ecosystem emerging around these facilities.

Conclusion

India’s ambitious strides in semiconductor manufacturing, underscored by the latest ₹3,300 crore investment in Gujarat, are set to transform the nation into a critical player in the global semiconductor supply chain. As the country continues to attract significant investments and build state-of-the-art facilities, it is well on its way to becoming a major hub for semiconductor innovation and production, thereby boosting the economy and creating new opportunities in the technology sector.