Government Greenlights Kaynes' Rs 3,307 Cr Semiconductor Facility in Sanand

The government has approved Kaynes Semicon's proposal to establish a Rs 3,307-crore semiconductor unit in Sanand, Gujarat. This facility will produce 6.3 million chips daily. IT Minister Ashwini Vaishnaw highlighted that India is developing a comprehensive semiconductor ecosystem under the India Semiconductor Mission. He assured that the country would adopt a long-term perspective on this critical sector and increase funding as necessary.

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Semiconductor Hub Development

Prime Minister Narendra Modi announced on X that the new semiconductor unit in Sanand would serve various sectors and create numerous jobs. Vaishnaw compared the semiconductor industry to steel and chemicals, which support many other sectors, and stated it would be vital for India's growth and industrial production plans.

The minister also provided an update on Tata's Dholera plant, noting that land acquisition is complete for this large and complex project. Tata Electronics will partner with Powerchip Semiconductor Manufacturing Corp (PSMC) of Taiwan to set up a semiconductor fab in Dholera, Gujarat, with an investment of Rs 91,000 crore.

Investment and Employment Impact

Kaynes Semicon's plant will occupy 46 acres, with a significant portion of its production already booked for Kaynes Industries. The facility will produce chips for various applications, including industrial, automotive, electric vehicles, consumer electronics, telecom, and mobile phones. Vaishnaw mentioned that power-related chips and those used in automobiles and home appliances would also be manufactured at this plant.

The minister emphasised the employment potential of semiconductor plants by likening them to foundational industries such as steel and chemicals. He noted that the electronics manufacturing sector in India is growing at a compound annual growth rate (CAGR) of nearly 17-18%, driving significant demand for semiconductors.

Progress on Tata's Fab Project

Vaishnaw reported that Tata's fab project is progressing well, with land allocated and geotechnical investigations completed. "It was approved in January of this year. Within such a short timeframe a lot of work has already happened. Land is allocated, and the geotechnical investigations are done. Whatever needs to be done for manufacturing, giving the final design of the plant, all those inputs are now ready," he said.

The technology agreements are being negotiated among various partners. The project will operate at the 28-nm node, with design work for the entire plant completed.

Micron's Project Update

Regarding Micron's project, Vaishnaw stated that the first "Made in India" chip would be available by mid-next year. In June last year, Micron announced an investment of USD 825 million to establish a new assembly and test facility in Gujarat.

Kaynes highlighted the multiplier effect of semiconductor projects on employment in India. "When we look at employment generation potential of a semiconductor plant, we have to think like a steel plant, chemical, plastic plant or refinery...as a foundational industry that feeds into many industries," he said.

The Indian Semiconductor Mission is designed with a minimum ten-year outlook to support India's industrial growth. Vaishnaw noted that India's large automobile and electronics manufacturing industries would benefit significantly from domestic semiconductor production.

The programme for developing semiconductors and display manufacturing ecosystems in India was announced in December 2021 with an outlay of Rs 76,000 crore. Vaishnaw indicated that there would be increased funding for this programme as details are finalised.

India's efforts to become a semiconductor hub received another boost with the Cabinet's approval of Kaynes Semicon's unit under the India Semiconductor Mission. The new facility in Sanand will cater to various sectors and provide employment opportunities for many young people.