Gujarat is rapidly establishing itself as India’s premier semiconductor hub, thanks to af combination of policy incentives, abundant resources, and a thriving chemical industry. At the heart of this transformation is Dholera, which is an expansive urban development spanning 920 sq. km, twice the area of Mumbai. Strategically located along the Delhi-Mumbai Industrial Corridor (DMIC), Dholera is a top contender to house India’s first semiconductor fabrication plant (fab), spearheaded by Tata Electronics in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC).
The construction of this advanced facility is already underway and is expected to be completed by 2026. With an investment of Rs 91,000 crore, this AI-enabled fab will have the capacity to produce 50,000 wafers per month. This marks a major milestone for India as it seeks to reduce its dependence on imported semiconductors.
Meanwhile, in the north, Sanand, a once-sleepy town near Ahmedabad, is undergoing a semiconductor-driven transformation. The area, first recognised for hosting Tata’s Nano plant in 2008, is now bustling with activity as it gets ready to welcome three assembly and testing units, known in the industry as Assembly, Testing, Marking, and Packaging (ATMP) and Outsourced Semiconductor Assembly and Testing (OSAT).
Among the key players is Micron Technology, the American chip giant, which is investing 2.75 billion dollar to set up an OSAT facility in Sanand. Additionally, the Murugappa Group’s C G Power is partnering with Japan’s Renesas and Thailand’s Stars Microelectronics to establish a top-tier OSAT plant with an investment of Rs 7,600 crore.
Policy Support and Infrastructure: Gujarat’s Winning Formula
Gujarat’s rapid rise as India’s semiconductor hub is largely due to a strong policy framework. In 2021, the Indian Government announced the India Semiconductor Mission (ISM), and Gujarat was quick to follow suit with its own Semiconductor Policy in 2022. The state offers significant capital assistance, including 40 Pper cent of capital expenditure (CAPEX) covered by the state in addition to central support. For companies setting up in Dholera’s Special Investment Region (SIR), a 75 per cent subsidy on land purchases is available for the first 200 acres.
Gujarat also stands out due to its vast availability of land and lower prices compared to other regions, making it an attractive destination for large-scale projects. Additionally, the state’s well-developed energy infrastructure, which includes 23,550 MW of installed capacity from conventional sources and 16,588 MW from renewable sources, ensures the availability of surplus power critical for power-intensive semiconductor fabs.
Water availability, another essential component for semiconductor production, is being addressed through significant investments in desalination plants. The Gujarat Industrial Development Corporation (GIDC) has already commissioned India’s first desalination plant at Dahej, offering treated water at a competitive price, further boosting the state’s attractiveness for chip manufacturers.
The presence of a large chemical cluster in Dahej, which supplies 33 per cent of the speciality chemicals used in semiconductor manufacturing, is a key advantage for Gujarat. With the only working Petroleum, Chemicals, and Petrochemicals Investment Region (PCPIR) in India, the state is well-positioned to support the growth of the semiconductor industry by ensuring a steady supply of essential chemicals.
As Gujarat cements its position as India’s semiconductor hub, comparisons with Taiwan’s Hsinchu City, home to some of the world’s largest semiconductor companies, are becoming more frequent. Like Hsinchu, Dholera has the potential to attract global players and become a centre for semiconductor innovation, supported by infrastructure investments like the Ahmedabad-Dholera Expressway and the upcoming Dholera Airport.
While Gujarat is leading the semiconductor revolution, other Indian states are also stepping up, with eight more states now actively pursuing semiconductor investments. However, the focus for Gujarat remains on building an ecosystem for chip-making equipment and addressing the shortage of skilled workers in the semiconductor field.
For now, all eyes are on Sanand’s Micron packaging plant, which could pave the way for further investments in India’s semiconductor ecosystem. As the semiconductor race heats up globally, Gujarat is positioning itself to be a key player in this critical industry.
