One after another, major chip makers are selecting Gujarat to set up their units. Micron Technologies and Vedanta Foxconn Semiconductors Ltd both are on track to establish their plants in the state. But why Gujarat?
According to the semiconductor industry, the Micron and Vedanta Foxconn projects are just two examples of the growing interest in semiconductor manufacturing in Gujarat. And there are several reasons why Gujarat is emerging as a preferred semiconductor manufacturing destination.
These projects are expected to create thousands of jobs and generate billions of dollars in investment. They are a sign that Gujarat is well-positioned to become a major player in the global semiconductor industry.
There are four major factors behind Gujarat becoming the preferred state for the semiconductor ecosystem. These include government support, the existing infrastructure, the talent pool, location advantage, and political stability in the state.
It is believed that the Gujarat government has been very supportive of the semiconductor industry, offering a number of incentives to attract investment. These include subsidies on power, water, and land, as well as tax breaks. This is the only state in India that has a dedicated semiconductor policy.
Gujarat has a well-developed infrastructure, including a strong power grid, a deepwater port, and a well-connected transportation network. This makes it an attractive location for semiconductor manufacturing, which is a capital-intensive industry that requires a reliable supply of power and a good transportation network.
Additionally, the state has a large pool of skilled workers, many of whom have experience in the manufacturing sector. This makes it a good location for semiconductor manufacturing, which requires a skilled workforce.
Industry insiders also point out that Gujarat is located in the western part of India, which is close to the major markets in Europe and West Asia. This makes it a good location for exporting semiconductors. Additionally, Gujarat is a politically stable state, which is important for businesses that are investing in long-term projects.
Geographical advantage
Dr Sailesh Lachu Hiranandani, who is the chairman of SRAM & MRAM Group, told News18: “Gujarat boasts of excellent infrastructure facilities, including well-developed industrial parks and special economic zones (SEZs) dedicated to the electronics and semiconductor sectors, offering conducive infrastructure, transportation, and logistics facilities. The state government has also taken various policies and initiatives to promote the semiconductor industry, offering incentives, tax benefits, and subsidies to attract semiconductor companies to set up manufacturing units in the state. A large market, as well as proximity to key markets in India and neighbouring countries, also plays a pivotal role here.”
Sudhir Nair, treasurer at India Electronics & Semiconductor Association (IESA) and founder of eInfochips, Gujarat, also talked about some geographical advantages.
“Gujarat has a unique advantage of a 940 sq km land parcel, which is not available anywhere in India or Asia. This land is ideal for semiconductor manufacturing, which requires a lot of space,” he said.
According to him, the availability of the canal in the heart of Dholera that provides water from the Narmada Dam also makes this place ideal for manufacturing operations. Dholera, well-connected to Ahmedabad by road and rail, will also have a large international airport, which will make it easy to transport goods and people.
Furthermore, Nair said: “Gujarat is a power surplus state, so there is no risk of outages. It is also a hub for chemicals and other gases, which are essential for semiconductor manufacturing.”
The policy
Hiranandani specifically highlighted the role of Gujarat’s semiconductor policy. According to him, it played a significant role in setting the benchmark as a preferred destination for the semiconductor industry.
“The policy also supports various incentives, benefits, and provisions to encourage investments in the state, for instance, capital subsidies, interest subsidies, tax exemptions, and reimbursement of land costs,” he added.
Furthermore, the industry insider said that the state also ensures the availability of world-class infrastructure facilities, including reliable power supply, water, telecommunications connectivity, and other amenities necessary for semiconductor companies.
“Single-window clearance by the local government simplifies the bureaucratic procedures and reduces the time and effort required for obtaining necessary approvals, permits, and licences,” noted Hiranandani.
Overall, Gujarat has a number of advantages that make it an attractive location for semiconductor manufacturing. These advantages are likely to continue to attract investment in the future, as the global demand for semiconductors continues to grow.