Introduction
The global race to manufacture semiconductors—the foundation of the digital economy—has taken a historic turn in India. August 2025 saw the official inauguration of the nation’s first end-to-end chip facility in Sanand, Gujarat, a launch that signals India’s arrival as both a supplier and a strategic player on the world semiconductor map. Propelled by government vision, industry collaboration, and Gujarat’s robust infrastructure, this milestone paves the way for self-reliance, job creation, and global technology leadership.
The Global Context: Why Chip Manufacturing Matters
Semiconductors power every aspect of our digital lives, from smartphones and laptops to cars, medical devices, and defense systems. Global supply chain disruptions in recent years highlighted the acute dependency many nations, including India, have on foreign chip manufacturers. With a worldwide market set to surpass $1 trillion by 2030, local control of chip production has become a matter of national importance—impacting economic competitiveness, technological progress, and security.
India, already a powerhouse in semiconductor design, had long relied on imports for its chip supply. The launch of the Gujarat facility marks the first major leap towards bridging this gap.
Gujarat: The Heart of India’s Semiconductor Revolution
Why Gujarat Was Chosen
- Policy Framework: Gujarat was the first Indian state to launch a dedicated semiconductor policy, offering generous subsidies, streamlined clearances, and extensive infrastructure.
- Strategic Location: Sanand, near Ahmedabad and Dholera (site of additional upcoming fabs), provides proximity to ports, major highways, and industrial hubs, ensuring seamless global supply chain integration.
- Resource Availability: Critical chipmaking needs—round-the-clock power, ultra-pure water, and massive industrial land parcels—are well-supported in the region.
- Workforce Pipeline: Gujarat boasts a strong engineering education base, with over 270 universities and institutes specializing in electronics and semiconductor engineering.
- Investment Magnet: The state has attracted over ₹1.5 trillion in semiconductor investments, with major players such as Tata Electronics, Kaynes Semicon, and CG Power establishing projects.
Inside the Facility: A New Chapter for Indian Electronics
CG Power’s Sanand OSAT Facility
The landmark OSAT (Outsourced Semiconductor Assembly and Test) facility, launched by CG Power & Industrial Solutions through CG Semi Private Ltd, is the engine of the current transformation. Key features include:
- State-of-the-Art Design: The G1 facility spans 75,000 sq ft and delivers full-spectrum services: chip assembly, advanced packaging, testing, and post-test services—all under one roof.
- Production Capability: Peak capacity of 0.5 million units per day at G1, scaling up to 14.5 million units per day with the future G2 facility, which will cover 1 million sq ft and is targeted to be operational by end-2026.
- Applications: The first batch of “Made in India” microcontrollers will be used in applications such as automobiles, home appliances, and emerging technology sectors like drones.
Economic Impact
- Job Creation: Together, the G1 and G2 facilities will generate 5,000 direct and indirect jobs; the wider Gujarat semiconductor ecosystem is projected to create more than 20,000 skilled positions across construction, operations, R&D, logistics, and support services.
- Investment: CG Power and partners are investing over ₹7,600 crore (approx. $870 million) in five years, with additional mega-projects by Tata Electronics (₹91,000 crore).
The Broader Ecosystem: More Than One Plant
The Sanand facility is just the beginning. Gujarat hosts multiple ongoing and approved semiconductor projects, including:
- Tata Electronics’ Dholera Fab: India’s first AI-enabled semiconductor fab in partnership with Taiwan’s PSMC, targeting 50,000 wafers/month with investments north of ₹91,000 crore and a focus on cutting-edge manufacturing for automotive, AI, and communications.
- Kaynes Semicon’s Plant: With a chip output capacity of 6 million units per day, meeting the needs of smartphones, EVs, industrial automation, and telecom sectors.
- Global Collaborations: Renesas (Japan) and Stars Microelectronics (Thailand) are technology partners, accelerating the development of local expertise and export capabilities.
A Vision for “Made in India, for the World”
The Sanand facility isn’t just about India’s internal needs. The vision is inherently global—leveraging India’s youthful engineering workforce, competitive costs, and robust policy push to establish India as a reliable global alternative to current manufacturing giants in East Asia. Government and industry leaders underscore this point:
- Prime Minister Modi’s Vision: Make India a global hub for chip supply; export to the world while securing the domestic market.
- Filling Global Talent Gaps: By 2032, the world faces a shortage of 1 million semiconductor professionals. India aims to bridge a significant portion of this shortage.
- Export Focus: Chips from Gujarat will target not only Indian manufacturers but also international OEMs, building on trust, transparency, and supply chain resilience.
Strategic Significance: More Than Economics
Geopolitical Leverage
Semiconductors have become a battleground for technology leadership amid intensifying U.S.-China trade and technology tensions. India’s entry into chip manufacturing gives it “fab” credibility—strengthening partnerships with allies, reducing vulnerability, and raising its status in global electronics supply chains.
Security and Sovereignty
With semiconductors core to defense, critical infrastructure, and emerging tech, “Make in India” chips reduce reliance on imported technology, mitigate cyber risks, and enhance national security posture.
Self-Reliant India: “Atmanirbhar Bharat”
The ability to locally manufacture and export sophisticated chips is a cornerstone of the government’s “Atmanirbhar Bharat” (Self-Reliant India) mission. It unlocks new possibilities in electronics, mobility, AI, medical devices—and ultimately, technological sovereignty.
Challenges Ahead
Building chips is among the most challenging of all industries. Key hurdles include:
- Massive Capital Outlay: Billions are required upfront, and returns take years.
- Complex Ecosystem: Success demands not just plants but also supply chains for raw materials, chemicals, packaging, and logistics.
- R&D Investment: India must invest in next-gen technologies and move abreast of evolving global trends (from mature 28nm–90nm nodes to advanced 5nm–7nm and beyond).
- Skill Development: Continual investment in education, practical training, and academic-industry partnerships is essential.
- Environmental Sustainability: Effective water management and renewable energy usage are vital for long-term viability.
The Road Forward
India’s semiconductor journey has just begun, but Gujarat’s facility is a giant leap. Over the next few years, India’s goals are to:
- Scale up to commercial volumes and export.
- Move to advanced manufacturing nodes to power AI, 5G, and autonomous systems.
- Nurture an ecosystem of materials, design, and packaging firms across the value chain.
- Deepen global partnerships and become indispensable to global tech giants.
Conclusion
The operational launch of Gujarat’s chip facility is a transformational moment for India’s economy, industry, and standing in the world. From powering cars and fridges to securing national defense and enabling AI breakthroughs, these chips will touch every corner of human life.
India has sent a resounding message: Made in India, for the world is not just a slogan—it’s a reality unfolding at the heart of Gujarat. As the first chips roll out and more facilities go online, India’s semiconductor story has only just begun.
