Cabinet Approves New Semiconductor Unit Under India Semiconductor Mission

Nitin Konde, Apoorva Bajj

Sep 3, 2024 — 3 min read

Cabinet Approves New Semiconductor Unit Under India Semiconductor Mission

Ashwini Vaishnaw, the Minister of Electronics and Information Technology, announced on 2 September 2024 that the cabinet had given its approval to a proposal put out by Kaynes Semicon to establish a semiconductor unit in Sanand, Gujarat, with an investment of INR 3,307 crore (exactly $394.15 million).

Under the India Semiconductor Mission, this is the fifth semiconductor unit to be sanctioned, and it is the second unit to be established in Sanand province. The overall investment amounts to INR 1,52,307 crore, which is equivalent to almost US$18.15 billion.

India Semiconductor Mission

During December in the year 2021, the government made an expenditure of INR 76,000 crore to launch the ISM and the display manufacturing ecosystem. The semiconductor business is a "foundational industry" for India's domestic manufacturing aspirations, according to Vaishnaw. He stated that because this [ISM] is a lengthy program, there will undoubtedly be an increase in expenditures and that the government will return with the specifics of the program as soon as they are finalized.

The India Semiconductor Mission (ISM) is a specialized and independent Business Division that is part of the Digital India Corporation. Its primary objective is to establish a thriving semiconductor and display ecosystem to facilitate India's emergence as a global hub for the manufacturing and design of electronic devices. In consultation with government ministries, departments, and agencies, as well as industry and academic institutions, the mission aims to serve as a focal point for the comprehensive, coherent, efficient, and smooth deployment of the Program for Development of Semiconductor and Display Ecosystem. This mission will be led by global experts in the semiconductor and display ecosystem.

The Production Capacity of the New Unit

Chips made by Kaynes Semicon's assembly, testing, marking, and packaging (ATMP) unit can be utilized in electric cars, consumer electronics, mobile phones, telecom equipment, and various industries. The plant can generate 6 million chips per day.

Kaynes Semicon CEO Raghu Panicker announced that a 47-50 acre site in Sanand will be used to establish the new operation. The company has leveled, tested the soil, and examined the structure in the last three months. It will start excavating on 3 September 2024 or the day after it receives the approval notice. The clean room is scheduled to be built in six to eight months.

Panicker has stated that the company plans to earn some cash this fiscal year from the first packed chip for a paying customer, which he estimates to be produced by March 31, 2025.

The initial packaged chip for a paying client will be available by March 31, 2025. He promised that while they would make a little profit this fiscal year, most of their income would arrive in the following fiscal year.

Joining Hands With Global Players

The electronics manufacturer Kaynes Technology is situated in Karnataka, and it has a wholly-owned subsidiary called Kaynes Semicon. Lightspeed Photonics of Singapore became Kaynes Semicon's first OSAT (outsourced semiconductor assembly and test) customer last week, according to Panicker. He promised an announcement in the next weeks regarding the two new customers the firm had acquired, one in the United States and one in Taiwan.

Two technological partners from different countries—one from Malaysia, Globetronics, and the other from Japan, Aptos Technology—have joined forces with Kaynes Semicon to launch this innovative ATMP unit. To build packaging and testing capabilities in India, Kaynes Semicon will pay up to $5.5 million to Aptos for people's technical training and know-how licenses, according to an update filed with the National Stock Exchange by Kaynes in February 2024.