Cabinet Approves Two Semiconductor Units Worth INR 3,900 Cr in Gujarat

The Union Cabinet has approved two new semiconductor manufacturing projects with a combined investment of over INR 3,900 crore, marking another step in India’s effort to build a domestic chip ecosystem. 

The projects include a display-focused compound semiconductor facility in Dholera and a packaging and testing unit in Surat.

Together, the two units are expected to attract investments of around INR 3,936 crore and generate approximately 2,230 skilled jobs. With these approvals, the total number of projects cleared under the India Semiconductor Mission has risen to 12, taking cumulative investments in the sector to nearly INR 1.64 lakh crore.

The development reflects a broader shift in India’s semiconductor strategy. Initially launched in 2021 with a Cabinet-approved outlay of INR 76,000 crore, the programme aimed to establish capabilities in chip fabrication, assembly, testing, and design. Over time, the policy framework has expanded to cover a wider ecosystem, including display technologies, packaging, design support, and workforce training.

The newly approved projects align with this approach by addressing different segments of the semiconductor value chain. While one focuses on advanced display modules, the other strengthens capabilities in chip assembly and testing—critical processes that convert manufactured chips into usable products.

The first project, led by Crystal Matrix Limited, will establish an integrated compound semiconductor fabrication and ATMP (assembly, testing, marking, and packaging) facility in Dholera. The unit is expected to manufacture mini and micro LED display modules and provide gallium nitride (GaN) foundry services. GaN is widely used in advanced electronics for its efficiency in handling high power.

The facility’s output will cater to a range of applications, including large display screens, smartphones, tablets, automotive displays, and emerging devices such as extended reality (XR) glasses and smartwatches. This reflects growing demand for high-performance display technologies across consumer and industrial segments.

The second project, by Suchi Semicon Private Limited in Surat, will set up an OSAT (outsourced semiconductor assembly and test) facility. The unit is expected to have an annual capacity of over 1,033 million chips, focusing on power electronics, analogue chips, and industrial applications. OSAT facilities play a key role in the semiconductor supply chain by ensuring chips are assembled, tested, and ready for deployment.

The approvals come alongside a renewed policy push in the sector. In the Union Budget 2026–27, the government announced India Semiconductor Mission 2.0, allocating INR 1,000 crore for the year. The next phase aims to strengthen domestic capabilities in semiconductor equipment and materials, while also supporting research, innovation, and skill development.

In addition, the government has increased the outlay for the Electronics Components Manufacturing Scheme to INR 40,000 crore, signalling a broader strategy to develop an integrated electronics manufacturing ecosystem rather than focusing solely on chip production.

Alongside manufacturing, India is also building momentum in chip design. The Design Linked Incentive (DLI) scheme currently supports 24 semiconductor design startups, which have collectively attracted nearly INR 430 crore in venture funding. The government noted that around 67,000 students and over 1,000 startup engineers are using chip design tools through a national platform.

The next phase of the programme aims to support at least 50 fabless companies—firms that design chips but outsource manufacturing. This indicates a dual focus on both design capabilities and production infrastructure.

Earlier announcements had indicated that 10 semiconductor projects had already been approved with investments of around INR 1.6 lakh crore, with pilot production underway in several units and commercial shipments expected to begin soon.

The latest approvals in Gujarat suggest that India’s semiconductor ambitions are gradually moving from policy announcements to on-ground execution. With continued investments across design, manufacturing, and supply chain development, the focus is now shifting toward timely implementation and scaling up production capacity.