Four years after unveling India’s first dedicated semiconductor policy, Gujarat has begun attracting ancillary ecosystem that supports chip manufacturing, with 10 companies applying for land and another 15 in discussions as the state looks beyond marquee fabrication projects.
While attracting large chip projects remains a priority, the state is increasingly focusing on building the supporting supply chain.
Neha Kumari, mission director of Gujarat State Electronics Mission, told FE that 10 ancillary units have applied for land and talks are on with 15 others. “A lot has been done and a lot needs to be done,” she remarked. “Currently in India, everything needed for chip making, including gold wires, is imported,” she said.
The industry requires 150-plus types of gases and chemicals, she said, adding that Japan, South Korea, and Taiwan have shown interest in setting up units. Linde, a global supplier of ultra-high purity atmospheric, process, and specialty gases essential for semiconductor manufacturing, has been allotted land. Sources in the know of developments said that announcements are likely to be made in a couple of months.
The shift reflects a move towards addressing a reality confronting India’s semiconductor aspirations. Fabrication plants may serve as the anchor investments, but the industry’s competitiveness depends on a well-greased network of suppliers, service providers, and skilled manufacturers that develop around them.
Already having Tata Electronics in Dholera, Micron, CG Semi, and Kaynes Semicon in Sanand, Gujarat is now seeking to leverage the early lead. Together, the four industries have brought an investment of over Rs. 1.24 lakh crore.
Aggressive Infrastructure Push
According to Kumari , since these are high-investment projects, they are eligible for both the center and states subsidies. In Gujarat, even the ancillary units are eligible for the same subsidy given to the semiconductor units.
It may be mentioned that the infrastructure for the semiconductor industry is being created in and around Dholera and Sanand at a cost of nearly Rs 70,000 crore to boost the sector. This also includes a Rs 20,667 crore semi-high-speed rail between Ahmedabad and Dholera which was approved under the PM’s Gati Shakti national master plan.
Localising the Cluster
Saif Alam, program manager at Kaynes Semicon Pvt. Ltd., said that to drive real domestic value, they are actively looking to localise their supply chain in Sanand across three critical areas: high-purity chemicals and gases, precision tooling for components like lead frames, and specialized, climate-controlled logistics.
“We expect primary packaging materials and assembly components to localise over the next 12 to 18 months. For the more complex chemical and high-precision partners, we see a mature, self-sustaining ecosystem taking shape within 36 months—officially cementing Sanand as India’s first complete chip-packaging cluster,” he remarked.
Going forward, the company plans to shift focus towards advanced packaging for AI and electric vehicles, anchoring a local ecosystem that puts Sanand on the map alongside hubs like Taiwan’s Hsinchu, Alam said.
According to officials, the semiconductor strategy builds on the investment facilitation model that Gujarat showcased after Tata Motors shifted the Nano Project to the state in 2008. For one of the semiconductor units, a custom office has been set up on the premises because the sensitive equipment needs a dust-free environment.
Underscoring the need to focus on IP creation, Neha Kumari expressed optimism that five years from now, Gujarat will be the leader in the semiconductor sector. Additionally, the field is open for the MSME sector also. However, ideally they would require having a JV for a certain standard that needs to be achieved in this sector. Gujarat’s challenge is no longer about attracting anchor projects but ensuring that chemicals, suppliers, logistics, gases, tools and skilled talent develop alongside them.