12 semiconductor plants approved: Where India’s chip manufacturing mission stands, what’s next

The Union Cabinet on May 5, 2026 approved two more semiconductor manufacturing projects — Suchi Semicon (Surat, Gujarat, ~₹868 crore) and Crystal Matrix (Dho...

What Happened

The Union Cabinet on May 5, 2026 approved two more semiconductor manufacturing projects — Suchi Semicon (Surat, Gujarat, ~₹868 crore) and Crystal Matrix (Dholera, Gujarat, ~₹3,068 crore) — bringing the total number of projects approved under the India Semiconductor Mission (ISM) to 12.
These are the final two projects to be approved under ISM Phase 1; the programme now transitions to ISM 2.0.
Cumulative approved investment across all 12 projects stands at approximately ₹1.64 lakh crore.
Suchi Semicon will produce lead-frame and wire-bond semiconductor chips (used in consumer appliances) at a capacity of 1,033.20 million chips per annum at its existing OSAT unit in Surat.
Crystal Matrix will set up an integrated compound semiconductor fabrication and ATMP facility at Dholera for gallium nitride (GaN) chips and mini/micro-LED display modules, with GaN foundry services on 6-inch wafers.
Earlier milestones in 2026: Micron Technology's ATMP facility at Sanand, Gujarat was inaugurated on February 28, 2026; Kaynes Semicon's OSAT plant (₹3,300 crore, 6 million chips/day capacity) was inaugurated on March 31, 2026.
Tata Electronics and Taiwan's PSMC are building India's first silicon semiconductor fabrication plant (fab) in Dholera with a ₹91,000 crore investment; first silicon is targeted for late 2026, with a capacity of 50,000 wafers per month at 28nm–110nm technology nodes.
Union Budget 2026–27 announced ISM 2.0 with a ₹40,000 crore outlay focused on semiconductor equipment manufacturing, materials, and full-stack Indian IP, with ₹1,000 crore allocated for FY2026–27.

Static Topic Bridges

India Semiconductor Mission (ISM) — The Policy Framework

The India Semiconductor Mission was launched in December 2021 under the Ministry of Electronics and Information Technology (MeitY) with a total financial outlay of ₹76,000 crore. It operates as an independent business division within the Digital India Corporation, with administrative and financial autonomy to drive India's semiconductor and display manufacturing ecosystem. The programme offers fiscal support of up to 50% of project cost to approved units covering silicon fabs, compound semiconductor facilities, ATMP/OSAT units, and chip design.

Launch: December 2021 under MeitY
Total outlay (Phase 1): ₹76,000 crore
Fiscal support: Up to 50% of project cost
Unit types covered: Silicon fabs, compound semiconductor fabs, ATMP/OSAT, display fabs, chip design (Design Linked Incentive scheme)
ISM 2.0 outlay: ₹40,000 crore (announced Budget 2026–27)

Connection to this news: The approval of Suchi Semicon and Crystal Matrix completes the 12-project roster under ISM Phase 1. The mission has successfully attracted both global players (Micron, PSMC) and domestic manufacturers (Tata, Kaynes, Suchi, CG Power) to build India's first generation of chip infrastructure.

Semiconductor Value Chain — Fabs, ATMP, and OSAT

The semiconductor supply chain has distinct stages: design (chip architecture), fabrication (converting silicon wafers into chips using photolithography), and packaging/testing (ATMP — Assembly, Test, Mark, Package). OSAT (Outsourced Semiconductor Assembly and Test) refers to specialist firms that handle only the packaging and testing stages. India's approved projects span the entire post-design chain: Tata-PSMC addresses fabrication; Micron, Kaynes, and Suchi Semicon address ATMP/OSAT; Crystal Matrix addresses compound semiconductor fabrication for GaN and LED applications.

Fabrication (Fab): Capital-intensive; Tata-PSMC in Dholera at 28nm–110nm, capacity 50,000 wafers/month
ATMP/OSAT: Lower capex; Micron (memory chips), Kaynes (6 million chips/day), Suchi Semicon (1,033 million chips/year)
Compound semiconductors: GaN, SiC — used in power electronics, EVs, LEDs; Crystal Matrix focus area
Technology nodes: Smaller nodes (e.g., 2nm, 5nm) are leading-edge; 28nm–110nm is mature/legacy — used in automotive, industrial, consumer electronics

Connection to this news: India's current approvals are concentrated in ATMP/OSAT and mature-node fabrication — strategically important for supply chain resilience even if not at the cutting-edge 2nm–5nm frontier that Taiwan and South Korea dominate.

Semiconductor Geopolitics and Supply Chain Diversification

Global semiconductor supply chains are highly concentrated: over 90% of advanced chips are fabricated in Taiwan (TSMC) and South Korea (Samsung). The COVID-19 pandemic exposed the risks of this concentration when chip shortages disrupted automotive, electronics, and defence production worldwide. The US CHIPS Act (2022, $52 billion), EU Chips Act (2023, €43 billion), and Japan's semiconductor revival programme have all been designed to diversify chip production geographically. India's ISM positions it as a beneficiary of this "China+1" and "Taiwan+1" diversification push.

CHIPS and Science Act (USA, 2022): $52 billion in subsidies plus 25% investment tax credit for US chip manufacturing
EU Chips Act (2023): €43 billion to double Europe's global chip market share from 10% to 20% by 2030
India's advantage: Cost-competitive engineering talent, English-language ecosystem, democratic governance, existing IT-services supply chains
Dholera Special Investment Region: Greenfield industrial city in Gujarat; designated hub for India's semiconductor fabs

Connection to this news: The Tata-PSMC fab in Dholera directly benefits from Taiwan's need to diversify manufacturing outside its home island, while Micron's ATMP in Sanand reflects the US industry's interest in India as an alternative packaging location.

Key Facts & Data

Total ISM Phase 1 projects approved: 12
Cumulative approved investment: ~₹1.64 lakh crore
Latest two approvals (May 5, 2026): Suchi Semicon (~₹868 crore, Surat) and Crystal Matrix (~₹3,068 crore, Dholera)
Tata-PSMC fab: ₹91,000 crore, 50,000 wafers/month, 28nm–110nm, Dholera — first silicon targeted late 2026
Micron ATMP (Sanand): Inaugurated February 28, 2026 — processes DRAM and NAND flash for mobile, data centre, automotive
Kaynes Semicon OSAT (Sanand): ₹3,300 crore, 6 million chips/day — inaugurated March 31, 2026
Crystal Matrix: GaN compound semiconductor + mini/micro-LED display modules, 6-inch wafers, Dholera
Suchi Semicon capacity: 1,033.20 million chips per annum (lead-frame, wire-bond chips for consumer appliances)
ISM 2.0: ₹40,000 crore outlay; focus on semiconductor equipment, materials, and domestic IP
ISM 2.0 FY2026–27 allocation: ₹1,000 crore
Nodal ministry: MeitY (Ministry of Electronics and Information Technology)
Fiscal support under ISM: Up to 50% of project cost