Big boost to India Semiconductor Mission as government approves Rs 3,300 crore plant in Gujarat

The cabinet on Monday approved the proposal to set up a new semiconductor plant in Gujarat’s Sanand with a total Rs 3,300 crore. Kaynes Semicon Pvt Ltd will set up a unit to churn out roughly 60 lakh chips per day, which will cater to different sectors such as industries, automotive, and consumer electronics.

The upcoming facility will give impetus to the government’s India Semiconductor Mission, which was kicked off in 2022 with an aim to establish a semiconductor manufacturing system in the country as it looks to reduce reliance on similar facilities in other nations. The government hopes to fulfill the demand for chips in various sectors through local manufacturing by inviting vendors who will receive support from the government.

The first proposal for installing a semiconductor plant in Sanand, Gujarat received approval from the cabinet in June 2023. Earlier this year, the government gave a nod to establishing three semiconductor units as part of the ‘Programme for Development of Semiconductors and Display Manufacturing Ecosystem’ initiative, which was launched in 2021 with a total investment of Rs 76,000 crore.

Apart from the semiconductor plant in Sanand, the government has approved two more units in Gujarat. Semiconductor ATMP Unit for Specialised Chips will be set up by CG Power, Renesas Electronics Corporation, and Stars Microelectronics will be set up in Sanand with an investment of Rs 7,600 crore. A semiconductor unit called Semiconductor Fab by Tata Electronics Private Limited and Powerchip Semiconductor Manufacturing Corporation (PSMC) will come up in Gujarat’s Dholera with a total investment of Rs 91,000 crore.

Another facility is being set up in Assam by a collaboration between Tata Semiconductor Assembly and Test Pvt Ltd (TSAT) with an investment of Rs 27,000 crore. It will be called Semiconductor ATMP Unit.

The government said all four units will fetch an investment of about Rs 1.5 lakh crore, while their collective capacity to generate chips will be about 7 crore per day.