Having spearheaded a textile business for the last 30 years, a Surat-based businessman Ashok Mehta has diversified into the semiconductor industry by setting up a ₹870 crore Outsourced Semiconductor Assembly and Test (OSAT) facility. On Sunday, this facility from his semiconductor venture — Suchi Semicon — was formally inaugurated near Surat.

With a capacity to produce 3 million chips per day, this new OSAT facility will begin trial-run from January 2025. “We have been constructing this plant for the last two years. We are now ready with the plant and the trial run will begin by January 2025. Once it finishes, we will begin commercial production in the first quarter of next financial year,” said Mehta, founder and director of the Suchi Group, which operates one of the largest textile embroidery manufacturing units in India. 

“I have been associated with the textile sector for the last 30 years. It was next to impossible to diversify into such a technical sector (like semiconductors). But I was determined,” said Mehta, who visited 7-8 countries during the last three years to study the semiconductor ecosystem. He saw an opportunity to diversify during the Covid pandemic and took the initiative to set up a semiconductor unit. 

He said once the trial run starts, it would take 2-3 months to start commercial production. The company has already employed 120 engineers for operating the new OSAT facility, which was formally unveiled by Union minister of Jal Shakti CR Patil at a ceremony in Surat. The company official said that the trial run has been postponed as some machines for OSAT facility, being procured from South Korea, have been delayed by the shipping lines. 

“We are producing SoIC chips (System on Integrated Chips) in Phase-1 for which we have identified a US-based buyer,” Mehta said, adding that the facility is being set up with the help of partnership between semiconductor players from Japan and Philippines. “We cannot reveal the names now due to the non-disclosure agreements,” he added. In the second phase, the company plans to produce chips for the automobile industry.

Suchi Semicon has already applied for Centre’s incentives under SPECS (Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors), as well as the India Semiconductor Mission (ISM), and is expecting to get incentives both from the Centre and the Gujarat government.

The company will be spending ₹870 crore on the plant that will be set up in three phases in the next three years. “In future, we will expand this facility to produce 5 million chips per day,” he added. Mehta said the his textile enterprises were debt free and the banks were ready to provide 30 percent of the investment as a loan. “We are also going to start a design division for designing semiconductor chips,” Mehta said adding that the clean rooms in the facility spread over 15,000 square feet took about six months to be constructed. An additional 15,000 square feet of clean rooms are being built at the same campus.

So far four semiconductor projects promising to invest ₹1.24 lakh crore are in various stages of investments in Gujarat. These entities will also create 53,000 new employment opportunities, the State government had said in November 2024. These entities include Micron’s advanced semiconductor ATMP plant in Sanand, with an investment of over ₹22,500 crore. Similarly at Dholera’s ‘Semicon City’ Tata Electronics Private Ltd (TEPL) and Taiwan’s PSMC are set to establish India’s first commercial Artificial Intelligence (AI)-enabled semiconductor fabrication facility, with an investment of over ₹91,000 crore, while CG Power and Renesas will set up a cutting-edge semiconductor OSAT facility in Sanand GIDC, supported by a total project investment of over ₹7,500 crore. Additionally, the State government has approved the establishment of Kaynes Semicon’s facility in Sanand, projected to produce around 60 lakhs chips daily with an investment of ₹3,300 crore.  

The only project that did not materialise so far is the Vedanta-Foxconn semiconductor venture worth an estimated ₹1.54 lakh crore. This was the first of a string of semiconductor projects for Gujarat that grabbed a lot of eyeballs in September 2022.

Published on December 15, 2024