Cabinet boosts semicon push with two Gujarat units, investment over Rs 3,900 Cr

The Union Cabinet has approved two more semiconductor manufacturing units with cumulative investment of more than Rs 3,900 crore, with a display-focused compound semiconductor facility in Dholera and a packaging and testing unit in Surat.

Together, the two projects are expected to bring in around Rs 3,936 crore and create about 2,230 skilled jobs. With these approvals, the number of sanctioned projects under the India Semiconductor Mission rises to 12, with cumulative investment now around Rs 1.64 lakh crore.

The larger significance is that India is no longer talking only about building chip ambitions on paper. The semiconductor programme, launched in 2021 with a Union Cabinet-approved outlay of Rs 76,000 crore, was designed to build capability across fabrication, assembly, testing and design. Since then, the policy has widened from pure chip-making to a fuller ecosystem that includes packaging, displays, design support and training.

The latest approvals fit that pattern as one unit is aimed at advanced display modules while the other is a packaging and testing facility, which is the stage where chips are assembled and checked before use.

The first project, by Crystal Matrix Limited, will set up an integrated compound semiconductor fabrication and ATMP facility in Dholera. ATMP stands for assembly, testing, marking and packaging, the process that turns a chip into a usable product.

This unit will make mini and micro LED display modules and also provide GaN foundry services. GaN is gallium nitride, a material used in advanced electronics because it can handle higher power efficiently. The products are meant for large screens, tablets, smartphones, in-car displays, and smaller devices such as XR glasses and smart watches.

The second project, by Suchi Semicon Private Limited in Surat, will build an OSAT facility, or outsourced semiconductor assembly and test unit, with a proposed annual capacity of 1,033.20 million chips for power electronics, analogue chips and industrial systems.

This latest move also comes at a moment when the policy push around semiconductors has sharpened. In the Union Budget 2026-27, the government announced India Semiconductor Mission 2.0 with a provision of Rs 1,000 crore for the year.

The new phase is meant to deepen domestic capabilities in equipment and materials, develop Indian semiconductor intellectual property, and support research and training centres for a skilled workforce. 

The same budget also proposed lifting the outlay for the Electronics Components Manufacturing Scheme to Rs 40,000 crore, showing that the government now sees chips and components as part of a wider industrial strategy rather than an isolated sector.

On the design side, India is quietly building strength that may matter as much as factories. The Design Linked Incentive scheme currently supports 24 semiconductor design startups, which have attracted nearly Rs 430 crore in venture capital funding.

The government said about 67,000 students and more than 1,000 startup engineers are using chip design tools provided through the national design platform. In a sector where a tapeout, the final step before fabrication, can determine whether a design reaches the market, these numbers matter because they show that talent, not just capital, is beginning to accumulate.

The government has also said the next phase aims to enable at least 50 fabless companies, that is, firms that design chips but do not own factories.

Announcements earlier this year have noted 10 projects were already approved with about Rs 1.6 lakh crore of investment, pilot production had begun in four units, and more commercial shipments were expected soon.

The new Gujarat approvals suggest that India’s semiconductor story is moving from announcement to execution, with design support, fiscal incentives and manufacturing approvals beginning to reinforce one another. The challenge now is more about delivery, supply chain depth and the speed at which these projects can move from construction to steady output.