New Delhi: In an effort to foster a dynamic semiconductor ecosystem, the Union Cabinet, chaired by Prime Minister Narendra Modi, has given its approval to the proposal submitted by Kaynes Semicon Pvt Ltd to establish a semiconductor unit in Sanand, Gujarat.
This proposed unit is to be established with an investment of Rs 3,300 crore.
According to a statement from the official authorities, the capacity of this unit is projected to reach 60 lakh chips per day.
The semiconductors produced by this facility are intended to serve a broad spectrum of applications, including but not limited to industrial, automotive, electric vehicles, consumer electronics, telecommunications, and mobile phone sectors.
The Programme for the Development of Semiconductors and Display Manufacturing Ecosystem in India was officially announced on December 21, 2021, with an allocated budget of Rs 76,000 crore.
In June, 2023, the Union Cabinet granted its approval for the establishment of a semiconductor unit in Sanand, Gujarat.
Further, in February, 2024, the approval was extended to three additional semiconductor units. Tata Electronics is in the process of setting up a semiconductor fabrication facility in Dholera, Gujarat, and another semiconductor unit in Morigaon, Assam. CG Power is also in the planning stages of establishing a semiconductor unit in Sanand, Gujarat.
The construction of these semiconductor units is proceeding at an accelerated pace, leading to the emergence of a robust semiconductor ecosystem in the vicinity of these facilities. This development is expected to attract an investment of nearly Rs 1.5 lakh crore and will cumulatively increase the capacity to produce approximately 7 crore chips per day.
Tata Group is optimistic that the commercial production of semiconductor chips at the two facilities, located in Gujarat and Assam, will commence in 2026. The shortage of semiconductor chips during the Covid-19 pandemic underscored the critical need for indigenous manufacturing to bridge the gap for national security and to stimulate indigenous innovation.
Micron, a leading American chip manufacturer, is in the process of establishing its high-end semiconductor fabrication plant in Gujarat, India, marking the nation's inaugural venture in this sector. The facility is anticipated to commence operations in late 2024.
Currently, construction is underway on four semiconductor units, three located in Gujarat and one in Assam.
Semiconductors play a pivotal role in contemporary society, essential for the production of a wide range of devices, including smartphones, medical equipment, automobiles, and electronic devices. According to reports from the media, approximately 70 percent of the global semiconductor manufacturing capacity is concentrated in South Korea, Taiwan, China, the United States, and Japan.
India is on the brink of initiating commercial production of semiconductors and related products, aiming to establish itself as a global leader in this field, akin to the technology, nuclear, and digital sectors, as stated by Prime Minister Narendra Modi earlier this year. He emphasized the urgency of this initiative, highlighting India's lost decades in semiconductor manufacturing and the need for progress.
In alignment with its Atmanirbhar and Make in India strategies, the government has introduced Production Linked Incentive (PLI) schemes across various sectors, including electronics, to bolster Indian manufacturers' competitiveness on a global scale, attract investments, enhance exports, integrate India into the global supply chain, and reduce reliance on imports.
