Centre clears Kaynes' Rs 3,307 crore semiconductor unit in Gujarat

The Centre on Monday (September 2) approved a proposal by Kaynes Semicon to set up a semiconductor unit in Gujarat’s Sanand with 6.3 million chips per day capacity, entailing an investment of ₹3,307 crore.

‘Complete semiconductor ecosystem coming up’

Announcing the decisions of the Union Cabinet, IT Minister Ashwini Vaishnaw noted that a complete semiconductor ecosystem is coming up in India.

“Today, the Cabinet has approved Kaynes' plant, with a capacity of 6.3 million chips per day. The plant will come up in 46 acres, it is a big plant and large portion of the production will go for Kaynes Industries, it has already been booked," Vaishnaw said.

The plant will cater to several segments including industrial, automotive, electric vehicles, consumer electronics, telecom, mobile phones and the power sector.

The company has already acquired land in Sanand for the project, and the construction will start soon.

The proposed investment for the unit is about ₹3,307 crore.

"Power related chips…chips used in automobiles and home appliances, will also be produced in this plant," Vaishnaw said.

Self-reliance in semiconductor sector

The government notified the Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India on December 21, 2021 at a total outlay of ₹76,000 crore.

The proposal to set up a semiconductor unit in Sanand was approved in June last year.

The government approved three more semiconductor units in February this year – in Gujarat’s Dholera and Assam’s Moriga by Tata Electronics and another by CG Power in Sanand.

The two plants owned by Tata Group in Assam and Gujarat, are expected to be operational by 2026.

Similarly, a semiconductor fabrication plant by American chipmaker Micron in Sanand is likely to be operational by later 2024.

Why indigenous manufacturing is vital?

The semiconductor shortage witnessed during the COVID-19 pandemic pushed the government to encourage indigenous manufacturing of chips.

Semiconductors are a key ingredient in the manufacture of several devices including phones, cars, electronic gadgets and medical devices.

India is trying to attain self-reliance in the sector at a time when around 70 per cent of the total semiconductor manufacturing capacity is concentrated in South Korea, Taiwan, China, the US and Japan.