SUMMARY
- The Union Cabinet has sanctioned the proposal by Kaynes Semicon to invest Rs 3,300 crore to establish a semiconductor unit in Gujarat.
- This decision aligns with the objectives of the India Semiconductor Mission (ISM) initiated by the central government in 2022.
- The proposed facility by Kaynes Semicon in Sanand, Gujarat is set to produce 60 lakh chips daily.
The Union Cabinet, under the leadership of Prime Minister Narendra Modi, has sanctioned the proposal by Karnataka-based Kaynes Semicon to establish a semiconductor unit in Gujarat, with an investment of Rs 3,300 crore.
This decision aligns with the objectives of the India Semiconductor Mission (ISM), a program initiated by the central government in 2022 to install a dynamic semiconductor and display ecosystem within the nation.
The proposed facility by Kaynes Semicon in Sanand, Gujarat is set to produce 60 lakh chips daily. These chips are intended for a variety of applications, including automotive, electric vehicles, consumer electronics, telecommunications, and mobile phones, as per a government announcement on Monday, September 2.
Additionally, leading electric two-wheeler manufacturer Ola Electric is in negotiations with Kaynes Semicon for chip manufacturing for its electric vehicles. Should this agreement be finalized, Kaynes Semicon would be responsible for the assembly and processing of imported wafers for chip production.
Previously, Kaynes Semicon was engaged in discussions with four international technology companies—Globetronics of Malaysia, Aptos Tech of Taiwan, Mixx Tech of the US, and A0I of Japan—to establish an outsourced semiconductor assembly and testing (OSAT) unit in Gujarat.
In June 2023, the Cabinet approved Micron’s proposal for the establishment of a semiconductor unit in Gujarat. Subsequently, the government granted approval for three additional semiconductor units in February 2024. While Tata Electronics is in the process of constructing a semiconductor fabrication facility in Dholera, Gujarat, and another semiconductor unit in Morigaon, Assam, CG Power is planning to establish a semiconductor unit in Sanand, Gujarat.
The statement further noted that the construction of all four semiconductor units is proceeding swiftly, leading to the emergence of a robust semiconductor ecosystem in the vicinity of these facilities. These four units are expected to contribute nearly Rs 1.5 Lakh crore in investment and collectively have a capacity to produce approximately 7 crore chips per day.
As per the PM, India has the potential to develop a ‘Made In India’ chip for all equipment. Notably, first indigenously-built chip is anticipated to arrive by the end of 2024. Aswini Vaishnav, Union Minister and IT Minister, stated that India will become one of the biggest centres for semiconductor in the nest five years.
The government’s emphasis on promoting electronics manufacturing through incentives to attract manufacturers, along with the adoption of the China+1 strategy by corporations amidst geopolitical tensions, is anticipated to strengthening India’s semiconductor market. This is expected to see a growth rate of 24% CAGR, reaching a market size of $150 Billion by 2030, from the current size of $33 Billion in 2023.
