Vibrant Gujarat 2024: India's first semiconductor chip will be produced in Gujarat this year

Tata group and Simmtech announce their plans to boost the semiconductor industry by setting up plants in the state. Union Minister Ashwini Vaishnaw and experts concede the need to develop and hire a vast pool of talent

By Naandika Tripathi Forbes India Staff

Published: Jan 11, 2024 06:04:09 PM IST

Updated: Jun 20, 2024 04:18:26 PM IST

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Image: Klaus-Dietmar Gabbert/picture alliance via Getty Images

After US chipmaker Micron, Tata group and Simmtech announced their plans to boost the semiconductor industry in Gujarat. During the 10th Vibrant Gujarat Global Summit, N Chandrasekaran, chairman of Tata group, mentioned that the company is on the verge of concluding and announcing “a huge semiconductor fabrication unit in Dholera”. The operations are expected to commence this year.

Another firm, South Korea’s Simmtech, has signed an MoU with the Gujarat government to set up a plant near the Micron plant in Sanand. The company is the world’s largest manufacturer of semiconductor substrate, the supporting material upon which the elements of a semiconductor device are fabricated.

During his address at the inaugural session of the summit, Jeffery Chun, global CEO, Simmtech, mentioned its previous co-location investments with Micron in China and Malaysia, adding that the company was looking forward to replicating the success in India as well. He said Simmtech was committed to boosting the growth of the semiconductor ecosystem in the country and creating an uninterrupted supply chain network.

This unit will be set up in Sanand, near Ahmedabad, at a cost of Rs1,250 crore, said Ashwini Vaishnaw, Union Minister for Electronics and Information Technology. Simmtech will support Micron's semiconductor plant in Gujarat.

In addition to this, Micron also signed an MoU with the New Age Makers Institute of Technology (NAMTECH), an ArcelorMittal Nippon Steel India education initiative, to develop talent for its semiconductor operations in India. The US-based firm has hired over 200 employees for its plant in India, which will begin operations by the first half of 2025. Three months after signing an agreement with the government of India, the chip-making giant commenced the construction of a factory in September 2023.

The company has announced a total investment of $2.75 billion. Of this, Micron will invest up to $825 million over two phases of the project, and the rest would come from the central and state governments. The memory chipmaker will receive 50 percent fiscal support for the total project cost from the Indian central government and incentives representing 20 percent of the total project cost from the state of Gujarat.

Addressing the Semiconductor and Electronics Seminar on the second day of the summit, Vaishnaw announced that Gujarat is poised to manufacture the country's first Make in India chip in 2024. He also urged IIT-Gandhinagar to establish a centre of excellence for research and development of semiconductors. The minister added that the next decade will require a million more talents in the industry, which India can provide.

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Investments announced by Micron earlier and Tata group now in the semiconductor space will further accelerate the emergence of Gujarat as the Electronics System Design and Manufacturing (ESDM) hub for India and the larger South Asian region, explains Nilaya Varma, co-founder of Primus Partners. “The establishment of manufacturing facilities combined with the design capability that already exists in India will help position India as one of the key players in the global semiconductor ecosystem. It is great to see Gujarat playing a pivotal role in helping India achieve both self-reliance and emerge as an ESDM powerhouse over the next decade,” he adds.

In comparison with leading manufacturing countries like Taiwan and China, India has a long way to go and catch up with the missed bus of getting into semiconductor manufacturing. Better late than never, though. India seems to be on the right path now, with global companies eyeing the opportunity to invest and expand here. While India is strong on the semiconductor design front, there is an immense need to get skilled workers for this sector.

When asked about lessons from Taiwan and China in semiconductor manufacturing, Vaishnaw said, “The biggest lesson in creating the semiconductor industry is to have absolute focus on the ecosystem. Because if you look at the number of gases and chemicals that go into semiconductor manufacturing, it's more than 250. Practically, in the periodic table, which is the table of all the elements available in nature, more than 80 elements are used in semiconductor manufacturing. It's a very complex thing… so if we focus on the ecosystem, we will get everything right.”