The Union Cabinet on Monday granted approval for Kaynes semiconductor manufacturing industry to be established in Gujarat. Allegations have surfaced suggesting that this industry, which was initially supposed to be set up in Telangana, was shifted to Gujarat after the Congress party came to power in the state.
Notably, the BRS government had already allocated land to the company in Telangana. However, instead of moving forward with the semiconductor industry, Kaynes is going ahead with an electronics manufacturing unit.
The Union Cabinet has now sanctioned a semiconductor unit at Sanand, Gujarat, with Kaynes Semicon Pvt Ltd investing Rs. 3,300 crore. This facility is expected to manufacture 60 lakh chips per day, catering to industries such as automotive, electric vehicles, consumer electronics, telecom, and mobile phones.
In line with the central government’s initiative to foster a semiconductor and display manufacturing ecosystem in India, Rs. 76,000 crore has been allocated. The first semiconductor manufacturing unit at Sanand was approved in June 2023, followed by the sanctioning of three additional units in February this year.
Kaynes Semicon had entered into an agreement with the previous BRS government to invest Rs. 2,800 crore in setting up a semiconductor manufacturing unit in Kongarakalan, Ranga Reddy district. Construction had even commenced in October last year. However, following a change in the state government, work halted in March this year. Reports emerged that the company had decided to relocate the semiconductor unit to Gujarat and convert the Kongarakalan project into an Electronics Manufacturing Services (EMS) unit.
During the BRS regime, efforts were made to position Hyderabad as a hub for semiconductor manufacturing, with the then Minister of Industries, KTR, engaging with several renowned companies, including Kaynes Semicon. Despite these efforts, the company’s decision to relocate the semiconductor unit to Gujarat after the assembly elections has raised concerns.
Industry insiders believe that had the industry been established in Telangana, it could have attracted more semiconductor manufacturers to the state. As it stands, Gujarat is steadily emerging as the center of India’s semiconductor sector, with four out of five semiconductor industries now set up in the state.