Cabinet Approves Kaynes Semicon's Rs 3,300 Crore Chip Facility In Sanand, Gujarat

The Union Cabinet today (2 September) approved a proposal by Karnataka-based Kaynes Semicon Private Limited to establish a semiconductor unit in Sanand, Gujarat, under the India Semiconductor Mission (ISM).

This significant venture will involve an investment of Rs 3,300 crore and will have the capacity to produce 60 lakh chips per day. The Sanand location is also set to host chip assembly, testing, marking, and packaging (ATMP) units from American chip giant Micron and Murugappa Group’s CG Power.

The semiconductor chips manufactured at the Sanand facility will cater to a wide range of industries, including automotive, electric vehicles, consumer electronics, telecom, and mobile phones, among others.

In June 2023, the Union Cabinet approved the first proposal for a semiconductor unit in Sanand, Gujarat.

Building on this momentum, in February 2024, three additional semiconductor proposals, totalling an investment of Rs 125,600 crore, at Dholera and Sanand in Gujarat and Morigaon in Assam were given the green light.

The Tata Group, in collaboration with Taiwanese foundry PSMC, is spearheading the development of a semiconductor fabrication plant in Dholera, with an estimated cost of Rs 91,000 crore. Additionally, Tata is establishing an Assembly, Testing, Marking, and Packaging (ATMP) unit in Morigaon, Assam, at a cost of Rs 27,000 crore.

Sanand will also host a packaging unit, developed by CG Power, utilising technology from Japan’s Renesas Electronics Corporation and Thailand’s Stars Microelectronics.

These ambitious projects are part of the government’s ‘India Semiconductor Mission’ and fall under the ‘Modified Schemes for Setting up of Semiconductor Fabs and Display Fabs in India’.

The government is committed to providing fiscal support covering 50 per cent of the project cost on a pari-passu basis to eligible applicants capable of executing these capital-intensive projects.

The construction of all four semiconductor units is progressing rapidly, contributing to the emergence of a robust semiconductor ecosystem around these facilities.

Collectively, these four units will attract an investment of nearly Rs 1.5 lakh crore and will have a combined capacity to produce approximately 7 crore chips per day.