Gujarat has taken a bold step towards bolstering India’s semiconductor ecosystem by becoming the first state in the country to implement a dedicated semiconductor policy. This policy, titled the ‘Gujarat Semiconductor Policy 2022-2027,’ aligns with Prime Minister Narendra Modi’s vision for a self-reliant and prosperous India by 2047.
Chief Minister Bhupendra Patel’s leadership has been instrumental in the successful rollout of this groundbreaking initiative, which aims to reduce the country’s dependency on semiconductor imports and foster a thriving manufacturing ecosystem within the state.
In a move that signals Gujarat’s commitment to this ambitious vision, the state government has established the ‘Gujarat State Electronics Mission.’ This dedicated body will oversee the effective implementation of the policy and ensure the state’s leadership in semiconductor self-reliance.
The launch of this mission is an essential step in strengthening Gujarat’s role in advancing India’s semiconductor capabilities, setting the stage for long-term economic growth in the sector.
One of the significant milestones in this initiative was the groundbreaking ceremony for the Micron semiconductor ATMP (Assembly, Testing, Marking, and Packaging) plant in Sanand.
With an investment of over Rs22,500 crore, this plant represents a massive leap forward for Gujarat’s semiconductor manufacturing capabilities. Additionally, the state is positioning itself as a hub for cutting-edge semiconductor technology, with Tata Electronics Private Limited (TEPL) and Taiwan’s PSMC set to establish India’s first commercial Artificial Intelligence (AI)-enabled semiconductor fabrication facility in Dholera’s ‘Semicon City.’ The project is expected to involve a massive investment exceeding Rs91,000 crore, marking a monumental shift in India’s semiconductor landscape.
As part of this drive to make Gujarat a global leader in semiconductor manufacturing, the state is also witnessing the establishment of several state-of-the-art facilities. For instance, CG Power and Renesas are joining forces to build an OSAT (Outsourced Semiconductor Assembly and Test) facility in Sanand, with a project investment surpassing Rs7,500 crore.
Additionally, Kaynes Semicon has received approval to set up its own semiconductor facility in Sanand. This facility is expected to produce around six million semiconductor chips daily, with an investment of Rs3,300 crore.
These developments reflect a broader shift in India’s approach to semiconductor manufacturing. Gujarat’s efforts are crucial in reducing the nation’s reliance on imported semiconductor chips while generating substantial employment opportunities in various high-tech sectors, such as automotive, electronics, telecommunications, and medical equipment.
These industries are expected to benefit significantly from the establishment of semiconductor manufacturing facilities, which will strengthen the state’s role as a crucial player in India’s economic growth.
The Gujarat Semiconductor Policy is not just about attracting investments; it is also designed to ensure the state remains an attractive destination for businesses in the semiconductor sector.
The Gujarat government has enhanced the support for capital expenditure by offering substantial incentives, including 40% financial assistance on top of the funding provided by the Government of India for semiconductor and display fabrication units. This financial backing plays a pivotal role in helping companies set up world-class manufacturing facilities in the state.
One of the key highlights of the policy is the range of incentives offered to semiconductor companies. The state offers a 100% one-time refund of stamp duty and registration fees, as well as a subsidy of Rs2 per unit for high-quality electricity supply at globally competitive rates.
Additionally, companies will benefit from a competitive water rate of Rs12 per cubic metre and exemption from electricity duties, making Gujarat an even more attractive destination for semiconductor manufacturers.
In line with its long-term vision, the Gujarat government is also focusing on Dholera, developing it as a premier ‘Semicon City.’ This futuristic smart city is being designed to accommodate the growing semiconductor sector while ensuring that industries and residents benefit equally from the infrastructure developments.
For semiconductor units setting up operations in Dholera, the state is offering attractive incentives, such as a subsidy of up to 75% on land acquisition for fabrication projects.
This robust policy framework has already started paying dividends. Gujarat is now home to several leading semiconductor companies, with four major firms set to invest over Rs1.24 lakh crore in new semiconductor projects.
These investments are expected to create approximately 53,000 new job opportunities across the state. The ongoing developments in Gujarat are laying the foundation for India’s long-term self-reliance in semiconductor production, which is an essential step towards reducing the nation’s dependence on foreign imports.
This ambitious move by Gujarat also complements the ‘India Semiconductor Mission’ launched by the central government in 2021, with a budget of Rs76,000 crore to boost India’s semiconductor sector.
The national semiconductor market, valued at $15 billion in 2020, is expected to grow significantly, projected to exceed $63 billion by 2026, a remarkable growth of over 400%. The Gujarat Semiconductor Policy is, therefore, a crucial component of India’s broader strategy to become a global semiconductor manufacturing hub.
Follow us
