India is fast-tracking its journey towards becoming a global powerhouse in semiconductor manufacturing, with significant new developments in the sector.

On Monday, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved a proposal by Kaynes Semicon Pvt Ltd to set up a cutting-edge semiconductor unit in Sanand, Gujarat.

This strategic move, involving an investment of Rs.3,300 crore, is part of India’s broader vision to create a vibrant semiconductor ecosystem, crucial for the country’s technological self-reliance.

The new semiconductor unit in Sanand will have a production capacity of 60 lakh chips per day, catering to diverse industries, including automotive, electric vehicles, consumer electronics, telecom, and mobile phones.

This initiative is aligned with the Program for Development of Semiconductors and Display Manufacturing Ecosystem in India, which was announced in December 2021 with a total outlay of Rs.76,000 crore. 

India’s semiconductor manufacturing ambitions have gained considerable momentum in recent years. In June 2023, the Union Cabinet approved a proposal to set up another semiconductor unit in Sanand, Gujarat, further consolidating the region’s position as a hub for semiconductor production. February 2024 saw the approval of three more semiconductor units, marking a major expansion in India’s semiconductor capabilities.

 

Tata Electronics is spearheading the development of a semiconductor fab in Dholera, Gujara, and another unit in Morigaon, Assam. Meanwhile, CG Power is setting up an additional semiconductor unit in Sanand, Gujarat. 

 

These initiatives are part of a broader strategy to create a robust semiconductor ecosystem in India. The cumulative investment in these semiconductor units is expected to reach nearly Rs.1.5 lakh crore, with a total production capacity of approximately seven crore chips per day. Construction of these facilities is progressing rapidly, with the Tata Group aiming to start commercial production of semiconductor chips by 2026 at its plants in Gujarat and Assam. The COVID-19 pandemic underscored the critical importance of indigenous semiconductor manufacturing, highlighting the need for national security and spurring innovation within the country.

In addition to domestic efforts, international collaborations are also playing a key role in India’s semiconductor ambitions. American chipmaker Micron is developing a high-end semiconductor fabrication plant in Sanand, Gujarat, which is expected to become operational by 2024. This plant represents India’s first foray into advanced semiconductor manufacturing and is a testament to the country’s growing capabilities in this vital sector. 

As Prime Minister Modi emphasized earlier this year, India is on the cusp of becoming a global leader in semiconductor production, akin to its achievements in technology, nuclear, and digital sectors. The government's Production Linked Incentive (PLI) schemes in electronics and other sectors are designed to make Indian manufacturing globally competitive, attract foreign investment, enhance exports, and integrate India more deeply into the global supply chain.