Cabinet approves another semiconductor unit in Gujarat, which will be India’s fifth

With an aim to develop a vibrant semiconductor ecosystem, the Union Cabinet chaired by Prime Minister Narendra Modi on Monday approved the proposal of Kenes Semicon Pvt Ltd to set up a semiconductor unit at Sanand, Gujarat.

The proposed unit will be set up with an investment of Rs 3,300 crore.

According to the official release, this unit will have the capacity to produce 60 lakh chips per day.

The chips produced at this unit will cater to a wide range of applications including sectors such as industrial, automotive, electric vehicles, consumer electronics, telecom and mobile phones.

The programme for development of semiconductor and display manufacturing ecosystem in India was notified on December 21, 2021 with a total outlay of Rs 76,000 crore.

In June 2023, the Union Cabinet approved the proposal to set up a semiconductor unit at Sanand in Gujarat.

Three more semiconductor units were approved in February, 2024. Tata Electronics is setting up a semiconductor fab at Dholera in Gujarat and a semiconductor unit at Morigaon in Assam. CG Power is setting up a semiconductor unit at Sanand in Gujarat

The construction of semiconductor units is progressing rapidly and a strong semiconductor ecosystem is emerging near the units. They will bring in an investment of about Rs 1.5 lakh crore and the cumulative capacity of these units is about 7 crore chips per day.

The Tata Group expects commercial production of semiconductor chips at two plants in Gujarat and Assam to begin in 2026. The chip shortage during Covid highlighted the importance of indigenous manufacturing to meet national security constraints and promote indigenous innovation.

US chipmaker Micron’s high-end semiconductor fabrication plant in Sanand, Gujarat, its first in India, is rapidly getting built. It is expected to be operational by the end of 2024.

In total, four semiconductor units are currently underway – 3 in Gujarat and 1 in Assam.

Semiconductors are vital to modern society and are needed to manufacture many devices, including phones, medical equipment, cars and electronic gadgets. According to media reports, about 70 percent of the total manufacturing capacity is concentrated in South Korea, Taiwan, China, the US and Japan.

While laying the foundation stone of three semiconductor plants earlier this year, Prime Minister Narendra Modi had said that India will soon start commercial production of semiconductors and related products and will become a global power in this sector like technology, nuclear and digital sectors. he/she had said that India has wasted decades in semiconductor manufacturing and now the time has come to move forward.

As part of its Atmanirbhar and Make in India scheme, the government launched production incentive (PLI) schemes in various sectors, including electronics, to make Indian manufacturers globally competitive, attract investments, boost exports, integrate India into global supply chains and reduce dependence on imports.