The Union Cabinet, led by Indian Prime Minister Narendra Modi, has approved the proposal of Kaynes Semicon Pvt. Ltd. to establish a new semiconductor manufacturing unit in Sanand, Gujarat, India, marking a significant step toward developing a robust semiconductor ecosystem in India, as reported by DD News on Sept. 2.
The unit represents an investment of 33,000 million Indian rupees (about $393.23 million) and aims to produce 6 million chips daily for various applications such as industrial, automotive, electric vehicles, consumer electronics, telecom and mobile phones. This initiative is part of the broader Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India introduced in December 2021, which has an overall budget of 760,000 million Indian rupees.
Previously, the Union Cabinet had sanctioned proposals for setting up three additional semiconductor units: Two by Tata Electronics, located in Dholera, Gujarat, and Morigaon, Assam, and another by CG Power in Sanand, Gujarat. These projects are progressing swiftly, contributing significantly to the growth of a comprehensive semiconductor manufacturing ecosystem. The anticipated investment in these four units is nearly 1.5 billion, with a combined production capacity of approximately 70 million chips per day.
Prime Minister Modi has highlighted the strategic importance of domestic semiconductor production for national security and the encouragement of local innovation. He has expressed optimism for India's potential to become a global leader in this sector following the foundation-laying ceremony for the three semiconductor plants earlier in 2024. The government's focus on self-reliance and manufacturing growth is further supported by Production Linked Incentive (PLI) schemes across various sectors, including electronics, designed to enhance the competitiveness of Indian manufacturers, attract foreign investments, boost exports and diminish the reliance on imported goods.
