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Cabinet green lights Rs 33 billion semiconductor unit

2024-09-04

In a major step towards strengthening India's semiconductor ecosystem, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the establishment of a semiconductor manufacturing unit by Kaynes Semicon Pvt Ltd in Sanand, Gujarat. This project, involving an investment of Rs 33 billion, is expected to significantly enhance India's semiconductor production capabilities.

The new facility will have a production capacity of 6 million chips per day, catering to diverse industries such as automotive, electric vehicles, consumer electronics, telecom, and mobile phones. This initiative aligns with the Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India, which was launched in December 2021 with an allocated budget of Rs 760 billion.

This latest approval adds to the momentum of India's burgeoning semiconductor industry. In June 2023, the Cabinet had already approved several semiconductor projects, including Tata Electronics' facilities in Dholera, Gujarat, and Morigaon, Assam, as well as another unit by CG Power in Sanand. These projects are anticipated to draw investments nearing ?1.5 trillion and achieve a combined production capacity of approximately 70 million chips per day.

India's semiconductor sector is rapidly advancing, with commercial production from Tata Group?s plants in Gujarat and Assam expected to commence by 2026. The push towards domestic chip manufacturing is a response to global shortages experienced during the COVID-19 pandemic, highlighting the strategic need for self-reliance in this critical industry.

Moreover, American chipmaker Micron Technology is also establishing India's first high-end semiconductor fabrication plant in Sanand, Gujarat, expected to be operational by late 2024. This brings the total number of semiconductor units under development in India to four, with three in Gujarat and one in Assam.

As semiconductors are vital components in various modern technologies, from smartphones to medical devices and vehicles, India's focus on becoming a global player in this sector is crucial. Prime Minister Modi has emphasised that "India will soon start commercial production of semiconductors and related products and become a global power in this sector," reflecting the nation's commitment to technological self-sufficiency under the Atmanirbhar Bharat and Make in India initiatives. (ET)