The cabinet has given the green light to Kaynes Semicon's Rs 3,307 crore semiconductor unit in Sanand, Gujarat, marking the fifth facility under the India Semiconductor Mission. This approval raises the total investment in the mission to Rs 1,52,307 crore. Electronics and Information Technology Minister Ashwini Vaishnaw shared that the project represents an investment of Rs 3,307 crore (US$394.15 million).

The government launched the ISM and the display manufacturing ecosystem with an outlay of 76,000 crore in December 2021. Vaishnaw said the semiconductor industry is a “foundational industry” for India’s domestic manufacturing goals. “This [ISM] is a long programme so there will be an increased outlay for sure and we will come back with the details of the programme as and when they are finalized”, he said.

The Kaynes Semicon ATMP (assembly, testing, marking, and packaging) unit will have the capacity to produce approximately 6 million chips daily, which will be utilized in industries such as automotive, electric vehicles, consumer electronics, telecom equipment, and mobile phones. Raghu Panicker, the CEO of Kaynes Semicon, said the new unit will be set up on a 47-50 acre facility in Sanand. “In the last three months, structural tests, soil testing, and levelling were done. Tomorrow, or the day after, we will have the approval letter and then we will begin digging. In six to eight months, the clean room will be constructed".

Kaynes Semicon, a wholly owned subsidiary of Karnataka-based electronics manufacturer Kaynes Technology, recently made headlines when Panicker announced that Singapore-based Lightspeed Photonics had become the company's first OSAT (outsourced semiconductor assembly and test) customer. Additionally, he revealed that Kaynes Semicon has secured two more customers one from the US and another from Taiwan with official announcements expected in the coming weeks.

For this new ATMP unit, Kaynes Semicon has three technology partners Globetronics (Malaysia), Aptos Technology (subsidiary of Taiwan Mask Corporation), and AOI (Japan). According to Kaynes’s February 2024 update filed with the National Stock Exchange, Kaynes Semicon will pay Aptos up to $5.5 million to receive personnel technical training and know-how licensing to establish packaging and testing capabilities in India. 

The facility was originally planned for Telangana, where the company held a groundbreaking ceremony in October 2023. Vaishnaw also provided updates on the other four semiconductor units in India. In June 2023, American company Micron received approval for its ATMP facility in Gujarat, with a $2.75 billion investment. Construction of the plant commenced in September 2023.

In February, the cabinet approved three semiconductor projects. The first was India’s inaugural semiconductor fab unit in Dholera, Gujarat, established by Tata Electronics Private Limited (TEPL) in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC). Vaishnaw reported that the project is progressing well and is currently in the design phase. The other two approved projects include ATMP units by Tata Semiconductor Assembly and Test Private Limited (TSAT) in Morigaon, Assam, and by CG Power in partnership with Japan’s Renesas Electronics Corporation and Thailand’s Stars Microelectronics in Sanand, Gujarat.