Cabinet Approves Fifth Semiconductor Unit in India with ₹3,307 Crore Investment
The Union Cabinet has approved Kaynes Semicon’s proposal to set up a semiconductor unit in Sanand, Gujarat, with an investment of ₹3,307 crore (US$394.15 million), marking the fifth such unit under the India Semiconductor Mission (ISM). The new facility, which will focus on assembly, testing, marking, and packaging (ATMP) of semiconductors, aims to produce 6 million chips daily for industries like automobiles, electric vehicles, telecom, and consumer electronics. This brings the total investment under the ISM to ₹1,52,307 crore (US$18.15 billion). Minister Ashwini Vaishnaw described the semiconductor industry as foundational for India’s domestic manufacturing ambitions.
Kaynes Semicon’s facility will be built on a 47-50 acre site and is expected to release its first packaged chip by March 31, 2025. CEO Raghu Panicker said structural tests and soil testing are complete, with construction set to begin imminently. Kaynes has partnered with global technology leaders from Malaysia, Taiwan, and Japan for expertise and training and has already secured three customers, including Singapore-based Lightspeed Photonics. The project is expected to employ 500 people by March 2025, with 35 key hires and 15 expatriates already onboard.
Editor’s Note: The Union Cabinet has approved Kaynes Semicon’s plan to establish a semiconductor unit in Sanand, Gujarat, with an investment of ₹3,307 crore (US$394.15 million). This facility will focus on the assembly, testing, marking, and packaging of semiconductors, aiming to produce 6 million chips daily and contributing to India’s semiconductor ecosystem. Construction is set to begin soon, with the first packaged chip expected by March 31, 2025, and the project will create 500 jobs by then.
Telangana and Tamil Nadu Lead GSDP Growth Among Top 10 Indian States
Telangana, Tamil Nadu, and Rajasthan have emerged as the fastest-growing economies in FY24 among India’s 10 largest states by gross state domestic product (GSDP), according to data from the Ministry of Statistics and Programme Implementation (MoSPI). Telangana, the ninth-largest state, posted a GSDP growth of 9.2%, reaching ₹7.9 lakh crore, surpassing the national GDP growth rate of 8.2%. Tamil Nadu, the third-largest state, grew its economy by 8.2% to ₹15.7 lakh crore, while Rajasthan, in seventh place, saw an 8% growth.
Sectoral analysis shows the services sector played a critical role in the growth of these states, with Tamil Nadu’s services sector contributing 52% to the state’s gross value added (GVA) and growing at 9%, while Telangana’s services sector, holding a 63% share, grew 11%. Maharashtra, despite being the largest economy at ₹24.1 lakh crore GSDP, saw its services sector growth slow to 9%, a dip from 13% in FY23. Gujarat is expected to retain its second spot based on budget estimates, while Uttar Pradesh and Karnataka are nearly tied in the fourth and fifth positions, respectively.
Editor’s Note: Telangana and Tamil Nadu have emerged as the top performers in GSDP growth among India’s 10 largest states for FY24, with Telangana achieving a 9.2% increase and Tamil Nadu an 8.2% rise. The robust growth in these states, driven largely by their dynamic services sectors, outpaced the national GDP growth rate of 8.2%, highlighting their significant economic momentum.
Reliance Jio’s Ambitious AI Strategy Set to Challenge Big Tech Dominance
Reliance Jio, led by Mukesh Ambani, is positioning itself as a deep tech company with a bold focus on artificial intelligence (AI), aiming to disrupt the stronghold of global tech giants. Following its success in revolutionizing India’s telecommunications sector, Jio has introduced 100GB of free cloud storage to challenge Google One and Apple’s iCloud, a move likely to shake up the cloud storage market. While this offering may pressure competitors to lower prices, experts like Neil Shah of Counterpoint Research note that integrating Jio Cloud into existing app ecosystems dominated by Google and Apple will be a significant challenge. Moreover, Reliance plans to leverage data from its cloud services, including features like call recording and transcription, to gather Indic language data for training its AI models, with an emphasis on user consent.
Jio’s AI ambitions are further bolstered by plans to build a Gigawatt-scale AI-ready data centre in Jamnagar, Gujarat, powered by renewable energy. This ₹25,000 crore facility is expected to surpass the combined capacity of all data centres in India, though it may take up to three years to become operational. Experts like Sameer Dhanrajani of AIQRATE emphasize the importance of partnerships with global AI leaders such as OpenAI, Meta, and Google to compete with hyperscalers like AWS and Azure. As India’s public cloud market is projected to reach $26.1 billion by 2027, Reliance’s entry as a cloud player provides a domestic alternative for enterprises seeking to diversify their cloud strategies, potentially reshaping the tech landscape in India.
Editor’s Note: Reliance Jio, under Mukesh Ambani, is aiming to disrupt the dominance of global tech giants by aggressively pursuing artificial intelligence and cloud storage innovations. The company has introduced 100GB of free cloud storage to compete with Google One and Apple’s iCloud, while also planning a massive AI-ready data center in Gujarat to enhance its capabilities. Jio’s strategy includes leveraging data for AI development and seeking partnerships with global tech leaders to challenge established cloud providers, potentially reshaping India’s tech landscape as the public cloud market grows.
India Increases Chip Production Incentives to $15 Billion Amid Push for Semiconductor Self-Reliance
The Indian government is set to raise its chip manufacturing incentive policy, boosting the funding outlay for the second phase to $15 billion, up from the $10 billion allocated in the first phase. This increase coincides with Tata Group’s ongoing construction of India’s first commercial semiconductor fabrication plant, in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC), a project estimated to cost over ₹91,000 crore. In addition, three Assembly, Testing, Marking, and Packaging (ATMP) and Outsourced Semiconductor Assembly and Test (OSAT) plants have been approved, including facilities by Micron Technology, Tata Group, and CG Power in partnership with Japan’s Renesas Electronics, with total investments surpassing ₹1.48 lakh crore.
These government-backed initiatives are part of India’s strategic effort to reduce dependence on foreign chipmakers and strengthen its semiconductor supply chain amid global geopolitical tensions. While India’s current chip production is minimal, the government’s substantial subsidies and state incentives like discounted land and electricity rates are expected to attract key investments. However, the Tata-PSMC plant will not produce advanced node chips due to technological limitations, an area where companies like Taiwan’s TSMC hold a significant edge. Despite these challenges, establishing domestic chip fabrication is critical to India’s economic and strategic goals, spanning industries from aerospace to consumer electronics.
Editor’s Note: India is increasing its chip manufacturing incentives to $15 billion in the second phase of its semiconductor push, up from $10 billion previously allocated. This boost supports Tata Group’s construction of India’s first commercial semiconductor fabrication plant in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation, alongside the approval of several ATMP and OSAT plants by major firms. Despite the challenge of not producing advanced node chips, these initiatives aim to reduce foreign dependency and bolster India’s semiconductor capabilities, impacting a range of industries from aerospace to consumer electronics.
India and Singapore to Sign Landmark Semiconductor Pact During PM Modi’s Visit
India and Singapore are poised to ink a major agreement on semiconductor cooperation during Prime Minister Narendra Modi’s visit to Singapore on September 4-5. PM Modi will meet with Singapore’s newly elected President Tharman Shanmugaratnam and Prime Minister Lawrence Wong as part of the trip. The pact aims to boost collaboration in the semiconductor sector, a critical area of focus for both nations, as India continues to strengthen ties with global partners to build a robust semiconductor ecosystem.
This agreement comes amid India’s growing efforts to collaborate with key players like the US, Taiwan, and the EU in the semiconductor space. Notable initiatives include a partnership between Purdue University and the India Semiconductor Mission, and a joint venture between Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC), which has led to the construction of India’s first commercial semiconductor fab in Dholera, Gujarat. The new pact with Singapore is expected to further enhance India’s global footprint in semiconductor manufacturing.
Editor’s Note: India and Singapore are set to sign a significant semiconductor cooperation agreement during Prime Minister Narendra Modi’s visit to Singapore on September 4-5, aimed at strengthening ties in this crucial sector. This pact, alongside existing collaborations with the US, Taiwan, and the EU, is expected to further bolster India’s position in the global semiconductor ecosystem.
Southern Indian States Compete to Attract Foxconn’s ‘Foxconn City’ with Massive Land Offers
Foxconn, a leading global electronics manufacturer and key supplier for Apple, is being courted by multiple Indian states to set up large-scale industrial facilities akin to its ‘Foxconn City’ in China. Telangana has proposed a 2,000-acre site for the project, with the state’s IT and industries minister, Duddilla Sridhar Babu, revealing that Foxconn’s subsidiaries and suppliers from Taiwan, China, and the US could potentially set up operations there. Andhra Pradesh and Karnataka are also competing for Foxconn’s attention, with Andhra Pradesh offering 2,500 acres for an industrial park, while Karnataka has proposed 300 acres for a supplier park.
Foxconn’s interest in India continues to grow, with its chairman, Young Liu, expressing plans for an ‘industrial township’ near Chennai during a recent event in Tamil Nadu. The precise locations of the land offers from Andhra Pradesh and Karnataka have not yet been disclosed. With Foxconn expanding its presence in India, the competition among southern states highlights the importance of securing large-scale investments to boost local manufacturing and create jobs in the region.
Editor’s Note: Southern Indian states are competing fiercely to attract Foxconn’s planned ‘Foxconn City,’ with Telangana offering a 2,000-acre site, Andhra Pradesh proposing 2,500 acres for an industrial park, and Karnataka suggesting 300 acres for a supplier park. Foxconn’s chairman, Young Liu, has also indicated interest in establishing an ‘industrial township’ near Chennai, reflecting the company’s expanding presence in India. This intense competition underscores the strategic importance of securing such large-scale investments to enhance local manufacturing and job creation.