Cabinet Approves 2 New Semiconductor Manufacturing Units

The Union Cabinet has approved two new semiconductor manufacturing projects with a combined investment of ₹3,936 Cr under the India Semiconductor Mission (ISM).

Both the units will come up in Gujarat and will create about 2,230 skilled jobs.

The first unit will be set up by Crystal Matrix Ltd. It will be a compound semiconductor fab and assembly, testing, marking and packaging (ATMP) unit in Dholera. The facility will manufacture mini and micro-LED display modules using gallium nitride (GaN) technology. It will also offer GaN foundry services, including epitaxy on 6-inch wafers.

The plant will produce 72,000 square metres of display panels annually, along with 24,000 sets of RGB GaN epitaxy wafers. These components find application in TVs, commercial displays, smartphones, tablets, in-car screens, XR devices, and smartwatches.

The second unit will be an outsourced semiconductor assembly and test (OSAT) facility which will be set up by Suchi Semicon in Surat. It will focus on discrete semiconductors with a planned capacity of over 1,033 Mn chips per year. These chips will cater to sectors such as power electronics, automotive, industrial automation and consumer electronics.

With these approvals, the total number of projects cleared under the ISM has reached 12, with overall planned investments of about ₹1.64 Lakh Cr.

The Centre said that the new units will add to the existing semiconductor push, which includes support extended to over 300 academic institutions and more than 100 startups for chip design. Some of the previously approved projects have already begun commercial shipments, while a few others are expected to go live soon.

The approvals come at a time when global supply chains remain under pressure, forcing countries to diversify sourcing and reduce dependence on a few regions.

Against this backdrop, India is positioning itself as an alternative hub. As per an Inc42 report, the country’s semiconductor market could grow to $155 Bn by 2031 from about $62 Bn in 2026, driven by policy support, rising domestic demand and global supply chain shifts.

After committing ₹76,000 Cr in incentives under ISM, spanning fabrication support and design-linked incentives, the Centre announced ISM 2.0 earlier this year.

In parallel, more than $15 Bn has been committed across the value chain, including large projects such as the Tata-PSMC fab and Micron’s ATMP unit, along with R&D expansions by global players like AMD and NXP.

However, challenges remain. The sector is highly capital intensive, requires long-term R&D investment and depends heavily on access to reliable power, water and imported materials. India currently spends about 0.6% of its GDP on R&D and continues to rely on imports for over 90% of semiconductor inputs.

The post Cabinet Approves 2 New Semiconductor Manufacturing Units appeared first on Inc42 Media.