Cabinet Approves Kaynes’ Semiconductor Unit In Gujarat

Centre Mulls Expanding Scope Of INR 76,000 Cr India Semicon Mission

SUMMARY

The proposed unit by Kaynes Semicon in Gujarat’s Sanand will have the capacity to produce 60 Lakh chips per day

The chips produced in this unit will cater to applications in segments such as automotive, EVs, consumer electronics, telecom, and mobile phones, among others

While the Centre cleared Micron’s semiconductor unit proposal last year, it approved three more semiconductor proposals earlier this year to develop the semiconductor ecosystem in the country

The union cabinet, chaired by Prime Minister Narendra Modi, has approved the proposal of Kaynes Semicon to set up a semiconductor unit in Gujarat with an investment of INR 3,300 Cr.

The proposal was approved under the India Semiconductor Mission (ISM), which was launched by the central government in 2022 with an aim to build a vibrant semiconductor and display ecosystem in the country.

The proposed unit by Kaynes Semicon in Sanand, Gujarat will have the capacity to produce 60 Lakh chips per day. The chips produced in this unit will cater to applications in segments such as automotive, EVs, consumer electronics, telecom, and mobile phones, among others, a government statement said on Monday (September 2).

It is pertinent to note that electric two-wheeler major Ola Electric was in talks with Karnataka-based Kaynes Semicon for manufacturing chips for its EVs. If the deal materialises, Kaynes would be manufacturing the chips by assembling and processing the imported wafers.

Earlier, Kaynes Semicon was said to be working on establishing an outsourced semiconductor assembly and testing (OSAT) unit in Gujarat in partnership with four global technology companies—Globetronics of Malaysia, Aptos Tech of Taiwan, Mixx Tech of the US, and A0I of Japan.

In June last year, the cabinet approved Micron’s proposal for setting up a semiconductor unit in Gujarat. Following that, the government approved three more semiconductor units in February this year. While Tata Electronics is setting up a semiconductor fab in Dholera, Gujarat and another semiconductor unit in Morigaon, Assam, CG Power is setting up one semiconductor unit in Sanand, Gujarat.

“Construction of all four semiconductor units is progressing at a rapid pace and a robust semiconductor ecosystem is emerging near the units. These four units will bring an investment of almost INR 1.5 Lakh Cr,” the statement said, adding that the cumulative capacity of these units is about 7 Cr chips per day.

The Centre’s focus on promoting electronics manufacturing by providing incentives to attract manufacturers and the China+1 strategy adopted by corporations amid the ongoing geopolitical tensions are expected to provide a boost to India’s semiconductor market, which is expected to grow at a 24% CAGR and reach a size of $150 Bn by 2030 from $33 Bn in 2023.