Why Gujarat is a Preferred Location for Micron, Vedanta and Foxconn’s Semiconductor Manufacturing Plants

Gujarat is being chosen by major chip makers, one after another, as the ideal location to establish their units. Micron Technologies and Vedanta Foxconn Semiconductors Ltd are both in the process of setting up their plants in the state. However, the question remains: what makes Gujarat so attractive to these companies?

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 popular semiconductor manufacturing destination.

These projects are expected to create thousands of jobs and bring billions of dollars in investment. They are a sign that Gujarat has good potential to become a major player in the global semiconductor industry.

Gujarat becomes the premier state of the semiconductor ecosystem due to four main factors. These include government support, existing infrastructure, talent, locational advantages and political stability of the state.

It is believed that the Gujarat government has heavily supported the semiconductor industry and offered several incentives to attract investment. These include subsidies for electricity, water and land, as well as tax breaks. This is the only state in India that has its own semiconductor policy.

Gujarat has a well-developed infrastructure, including a strong power grid, a deep sea port and good transport links. This makes it an attractive location for semiconductor manufacturing, a capital-intensive industry that requires reliable power supply and a good transportation network.

In addition, the state has a large number of skilled workers, many of whom have experience in the manufacturing sector. This makes it a good place 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 major markets in Europe and West Asia. This makes it a good place to export semiconductors. Also, Gujarat is a politically stable state, which is important for companies investing in long-term projects.

Geographical advantage

Dr. Sailesh Lachu Hiranandani, Chairman, SRAM & MRAM Group, told ReturnByte, “Gujarat has excellent infrastructural facilities, including well-developed industrial parks and Special Economic Zones (SEZs) dedicated to the electronics and semiconductor sectors, which provide favorable infrastructure, transportation, and logistics facilities. The state government has also implemented various policies and initiatives to promote the semiconductor industry, offering incentives, tax breaks and subsidies to attract semiconductor companies to set up manufacturing units in the state. The large market and proximity to key markets in India and neighboring countries are also key here.

Sudhir Nair, treasurer of India Electronics & Semiconductor Association (IESA) and founder of eInfochips in Gujarat, also spoke about some geographical advantages.

“Gujarat’s unique advantage is its land area of 940 square kilometers, 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 canal in the heart of Dholera, which provides water from the Narmada dam, makes this place ideal for manufacturing operations as well. Dholera, which is well connected to Ahmedabad by road and rail, will also have a major international airport to facilitate the movement of goods and people.

Further, 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 essential for semiconductor manufacturing.

Principle

Hiranandani particularly emphasized the role of Gujarat’s semiconductor policy. According to him, it played a significant role in setting the benchmark as a primary target for the semiconductor industry.

“The policy will also support various incentives, benefits and regulations to encourage government investment, such as capital subsidies, interest subsidies, tax exemptions and land cost reimbursements,” he added.

In addition, an industry insider said the state will also ensure the availability of world-class infrastructure facilities, including reliable electricity, water, telecommunication connections and other services necessary for semiconductor companies.

“The single window clearance of local government will simplify bureaucratic procedures and reduce the time and effort involved in obtaining necessary approvals, permits and licences,” Hiranandani pointed out.

Overall, Gujarat has several advantages that make it an attractive location for semiconductor manufacturing. These advantages are likely to continue to attract investment as global demand for semiconductors continues to grow.