India has officially approved its second semiconductor assembly and test facility in Sanand, Gujarat. Union Minister Ashwini Vaishnaw announced that the Cabinet has cleared the proposal from Kaynes Semicon Private Limited. This new unit joins a growing cluster of high-tech manufacturing plans aimed at building an independent hardware foundation for the country.
The Kaynes Semicon facility involves a Rs. 3,300 crore investment. Spanning 46 acres, the plant will focus on Outsourced Semiconductor Assembly and Test (OSAT) operations. This process includes the final stages of manufacturing where chips are assembled, tested for quality, and packaged for various uses.
The plant is expected to produce 6 million chips every day. These components will supply industries including; automotive and electric vehicles, consumer electronics and telecom.
The India semiconductor mission (ISM) landscape
This approval brings the total number of major projects under the India Semiconductor Mission to five. The government originally launched this program in late 2021 with a Rs. 76,000 crore budget. Total investment across these approved units has now reached approximately Rs. 1.5 lakh crore.
Current major projects include:
- Micron Technology: An assembly and test facility in Sanand, Gujarat.
- Tata Electronics: A fabrication plant in Dholera, Gujarat, and an assembly unit in Morigaon, Assam.
- CG Power: An OSAT facility in Sanand, Gujarat, partnered with Renesas.
- Kaynes Semicon: The newly approved OSAT unit in Sanand.
Together, these facilities have a projected cumulative capacity of 7 crore chips per day.
The need of Silicon sovereignty
The push for domestic plants addresses a fundamental reality of the modern economy: hardware is the base of all digital progress. Currently, a few companies and regions hold a near-monopoly on chip production. For example, NVIDIA dominates the market for Artificial Intelligence (AI) training chips, while Taiwan produces over 90% of the world’s most advanced semiconductors.
Relying entirely on these external sources creates significant risks. Global supply chain disruptions or shifts in trade policy can stall entire industries. By building “homeland” plants, India aims to achieve “silicon sovereignty.” This means having the physical hardware to run domestic digital services, defense systems, and telecommunications without fear of external blackouts.
Owning the hardware is essential for sustainable growth. While software can be updated remotely, the physical chip is where the processing happens. Without a domestic supply, a nation remains a consumer rather than a controller of its digital destiny.