Govt approves Kaynes’ semicon facility under Semiconductor Mission

The Union Cabinet approved Kaynes Semiconductor’s plans to set up an assembly, testing, marking, and packaging (ATMP) unit in Sanand, Gujarat with an investment of ₹3,300 crore. The capacity of this unit will be 60 lakh chips per day.

These chips will cater to a wide variety of applications in segments such as industrial, automotive, electric vehicles, consumer electronics, telecom, mobile phones, etc. The project will cover an area of 46 acres. Notably, in August, the electronics manufacturing services (EMS) provider had bought land with an investment of about ₹5,000 crore, several media reports said. 

The ATMP in Sanand is the fourth semiconductor facility receiving approval from the government under the India Semiconductor Mission (ISM). In February, the Union Cabinet approved the establishment of three semiconductor units. It included India’s first commercial semiconductor fab to be built by Tata Electronics in partnership with Taiwan-based Powerchip Semiconductor Manufacturing Corp, in Gujarat’s Dholera. 

Previously approved three units will be built at a cumulative investment of ₹1.26 lakh crore (or over $15 billion). Two of these units will be in Gujarat and one in Assam.

“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 ₹1.5 lakh crore. The cumulative capacity of these units is about seven crore chips per day,” the government said in press release.

The Union Budget 2024-25 announced in July allocated ₹21,936 crore to the Ministry of Electronics and Information Technology (MeitY). The allocation is 52% more than the revised estimate of FY24 which was ₹14,421 crore. This is also a 2.6% up from the interim budget allocation of ₹21,385.15 crore made in February. 

The majority of the budget allocation increase is towards the production-linked incentive (PLI) scheme for semiconductors and large-scale electronics manufacturing and IT hardware. PLI for large-scale electronics manufacturing and IT hardware was increased from ₹4,559.88 crore (revised estimates 2023-24) to ₹6,200 crore, in line with the interim Budget.