Suchi Semicon Begins Chip Plant Without Centre’s Incentive, Plans $100 Million Investment in 3 Years

• Chinmay
• December 17, 2024
• News, Semiconductor Industry
• $100 million investment, chip manufacturing, EV technology, Gujarat incentives, India semiconductor mission, Industry 4.0, power semiconductors, semiconductor production, SPECS, Suchi Semicon, workforce development
• 0 Comments

Gujarat-based Suchi Semicon has commenced semiconductor production without waiting for incentives under the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) or the India Semiconductor Mission. The company has announced an ambitious plan to invest $100 million (approximately ₹840 crore) over the next three years.

A Self-Sustained Business Plan Ashok Mehta, Chairman of Suchi Group and Founder of Suchi Semicon, emphasized that the company’s production strategy is not reliant on government incentives. “We have a foolproof business plan. Our business plan is not primarily for incentives. We have set up a plant to do business,” Mehta said. The Gujarat state government has already approved 20% incentives for the plant.

Suchi Semicon’s journey began during the Covid-19 semiconductor shortage, inspired by Prime Minister Narendra Modi’s call to turn crisis into opportunity. Following extensive research with industry experts, the company decided to establish a semiconductor plant, prioritizing overseas clients who have already placed orders. Trial production is underway, and components are currently undergoing client testing.

Funding and Expansion Plans To fund its operations, the company utilized capital from its successful textile business, secured a funding round through family and friends, and established a credit facility with Punjab National Bank. Mehta highlighted that the $100 million investment plan accounts for future incentives from the Centre, contingent on performance-based approvals.

Commercial Production Timeline Shetal Mehta, Co-founder of Suchi Semicon, confirmed that commercial shipments of semiconductors will commence in the first quarter of next year. The testing process for components varies between 2 weeks to 3-4 months, depending on application requirements.

Looking ahead, Suchi Semicon plans to enter the power semiconductor market in its second phase of expansion, as early as the next financial year. Technology Partnerships and Centre’s Approval Discussions with technology partners are at advanced stages, and a Memorandum of Understanding (MoU) is expected soon. Shetal Mehta noted that the Centre requires two key conditions for approving incentives: a technology partner and demonstrated experience in the sector. “We are rolling out production at our plant. I believe that the Centre will also look at our performance as one criterion for approving incentives,” Shetal said.

Growing Demand for Semiconductors Highlighting the future potential of semiconductors, Shetal Mehta explained their critical role across industries. For instance, a traditional car uses about 600 types of semiconductors, while an electric vehicle requires approximately 5,500 semiconductors. With growing technological demand, the semiconductor industry is poised for exponential growth.

Building a Skilled Workforce Suchi Semicon currently employs a team of 60 professionals, including industry veterans, and is training additional employees to scale up production. “Semiconductors are a new-age business and the future is of semiconductors across various domains,” Shetal added.

Through the legacy of its textile business, Suchi Group has built a network of industry contacts, fostering confidence in India’s semiconductor manufacturing capabilities. Suchi Semicon’s strategic move positions it as a pioneer in India’s growing semiconductor ecosystem.