In a historic step that aligns with Prime Minister Narendra Modi's vision of a "Viksit Bharat" (Developed India) by 2047, Gujarat has introduced its first-ever Gujarat Semiconductor Policy 2022-2027. This groundbreaking policy, launched under the leadership of Chief Minister Bhupendra Patel, is designed to elevate Gujarat to the forefront of India’s semiconductor industry.
The policy aims to support the state's growing demand for semiconductor self-reliance, with a particular focus on attracting domestic and international investments in semiconductor manufacturing and technology. A key player in implementing this ambitious policy is the newly established Gujarat State Electronics Mission, which will spearhead the state’s semiconductor development.
One of the significant milestones under the Gujarat Semiconductor Policy is the foundation stone laid by Chief Minister Bhupendra Patel for Micron Technology’s advanced Semiconductor Assembly, Test, Mark, and Pack (ATMP) plant in Sanand. This state-of-the-art plant, valued at over Rs 22,500 crore, represents a major leap forward in Gujarat's semiconductor sector. The Micron plant will enhance the region's capacity for semiconductor assembly and packaging, meeting growing demand for cutting-edge microchips, especially in sectors like consumer electronics, telecommunications, and automotive industries.
This development is part of a broader trend of industrialization in Gujarat, as the state becomes a critical hub for advanced manufacturing. The Gujarat government’s strategic vision and the new semiconductor policy are vital to this transformation, creating a robust ecosystem for high-tech industries and providing essential infrastructure to attract global players.
In another major development, Tata Electronics Private Limited (TEPL), in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC), is setting up India's first Artificial Intelligence (AI)-enabled semiconductor fabrication facility in Dholera, Gujarat. The AI-driven semiconductor fab will be located in the newly emerging ‘Semicon City’ and represents an investment exceeding Rs 91,000 crore. This facility will not only drive semiconductor production but will also serve as a catalyst for AI innovations across a range of industries, from electronics to automotive.
The Dholera project has been recognized as a vital component of Gujarat’s strategy to position itself as a semiconductor powerhouse in India. It aims to develop a self-sustaining ecosystem capable of catering to the increasing demand for high-performance chips globally. The scale and technological sophistication of the AI-enabled semiconductor fab demonstrate the state's forward-thinking approach and its commitment to technological advancement.
The Gujarat Semiconductor Policy has also fostered the establishment of additional high-profile semiconductor-related projects. CG Power and Renesas Electronics, two major players in the global electronics industry, are setting up a state-of-the-art Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand. This significant project, valued at more than Rs 7,500 crore, will cater to the growing demand for semiconductor testing and packaging services, contributing significantly to the local economy and employment.
The OSAT facility will also help address the increasing need for semiconductor testing as new semiconductor products are developed and launched. The facility will play a pivotal role in improving the efficiency of the semiconductor supply chain, making the production process faster and more reliable. Additionally, the Gujarat government’s policy support, including subsidies and financial incentives, will help ensure that this project, along with others in the pipeline, becomes a success.
Another prominent initiative under the Gujarat Semiconductor Policy is the approval of Kaynes Semicon’s facility in Sanand. This new facility, with an investment of Rs 3,300 crore, is expected to produce an impressive 6 million semiconductor chips daily. The establishment of this large-scale semiconductor manufacturing facility will further strengthen Gujarat’s position as a key player in India’s semiconductor industry.
Kaynes Semicon’s production capacity will not only meet local demand but also serve global markets, with chips used in a wide variety of applications, including smartphones, computers, and automotive technologies. This project is expected to generate significant employment opportunities, contributing to the overall development of the region.
The Gujarat Semiconductor Policy also includes a robust framework of financial incentives and support measures aimed at fostering growth in the semiconductor sector. One of the most notable incentives is the 40% capital expenditure subsidy, which will reduce the initial financial burden for semiconductor companies setting up their operations in Gujarat.
In addition to this, the state government offers several other financial benefits to semiconductor companies, including a 100% one-time refund on stamp duty and registration fees, as well as electricity and water subsidies. The policy also includes a significant land acquisition subsidy of up to 75% for semiconductor units located in the Dholera region, which is being developed as India’s first Greenfield Smart City. This initiative is a critical part of the state’s long-term vision of transforming Dholera into a leading semiconductor and technology hub.
The Gujarat Semiconductor Policy is expected to create substantial employment opportunities in the state, particularly in high-skilled sectors. According to the state’s Science and Technology Department, these semiconductor-related projects are estimated to generate approximately 53,000 jobs, which will not only benefit the local workforce but also support Gujarat’s broader economic goals.
The investment in the semiconductor sector will have a ripple effect across other industries, including electronics manufacturing, automotive, and AI technology, creating a dynamic, interconnected ecosystem. The policy's focus on high-tech job creation aligns with the state’s commitment to nurturing a skilled workforce equipped to meet the demands of tomorrow’s industries.
This state-level initiative complements the central government’s India Semiconductor Mission, launched in 2021 with a budget of Rs 76,000 crore to boost domestic semiconductor production. The Gujarat Semiconductor Policy is seen as a crucial component of India’s broader strategy to reduce dependence on foreign semiconductor imports and strengthen the country's self-reliance in this critical sector.
India's semiconductor market, valued at $15 billion in 2020, is projected to exceed $63 billion by 2026, according to industry analysts. The Gujarat Semiconductor Policy positions the state to take a leading role in this booming industry, driving both economic growth and technological advancements.
Conclusion: Gujarat's Semiconductor Policy - A Step Towards a Self-Reliant Future
The Gujarat Semiconductor Policy marks a turning point for the state's tech ecosystem, propelling it into a leadership role in India's semiconductor industry. With significant investments from global players, cutting-edge manufacturing capabilities, and a supportive government framework, Gujarat is poised to become a key player in the global semiconductor market. The policy, along with India’s broader semiconductor mission, will help fulfill Prime Minister Modi’s vision of making India a self-reliant technological powerhouse by 2047.