Prime Minister Narendra Modi recently inaugurated the CG Semi Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat. During the event, the Prime Minister reflected on an ambitious, yet unrealized, plan he had crafted two decades prior to establish a semiconductor manufacturing plant in the very same state.
Modi, who served as Gujarat's Chief Minister from 2001 to 2014, recounted developing a comprehensive proposal for a semiconductor facility. This included identifying a 350-400 acre site and engaging in discussions with various companies. However, he stated that the initiative failed to progress due to what he described as the central government's inability to move the project forward at the time. He expressed immense satisfaction in witnessing the current surge in India's semiconductor sector, a vision he had held for many years.
India's Renewed Semiconductor Push
The current momentum in India's semiconductor industry follows a renewed strategic focus. In December 2021, the Union Cabinet approved the India Semiconductor Mission 1.0, backed by an outlay of Rs 76,000 crore. This mission aimed to offer significant fiscal support, up to 50 percent, for silicon fabs, compound semiconductor facilities, assembly and testing units, and chip design endeavors.
Building on this foundation, the Union Budget 2026–27 introduced India Semiconductor Mission 2.0, allocating an additional Rs 1,000 crore. This latest phase emphasizes industry-led research and development, alongside the establishment of training centers to cultivate a skilled workforce and strengthen technological advancement within the country.
Growing Investment and Market Potential
As of December 2025, the government had already greenlit ten semiconductor projects across six states, attracting investments totaling Rs 1.60 lakh crore. Industry estimates cited by the government indicate a robust growth trajectory for the Indian semiconductor market, valued at approximately $38 billion in 2023. This figure is projected to reach $45-$50 billion by 2024-2025, with an ambitious target of $100-$110 billion by 2030.
Sanand Emerges as a Chip Manufacturing Hub
PM Modi highlighted Sanand, Gujarat, as a rapidly developing hub for semiconductor manufacturing. The CG Semi facility itself is expected to produce 20 crore chips annually, with an ambitious target to scale up to 500 crore chips per year. Union Electronics and IT Minister Ashwini Vaishnaw confirmed that chips produced at this plant will serve critical applications in automobiles and various industrial sectors. Significantly, these India-made semiconductors are also slated for export to major international markets, including Japan, the United States, and Europe.
The Prime Minister underscored the importance of industrial clusters, drawing parallels with global examples like Silicon Valley and Taiwan's Hsinchu Science Park. He noted that companies such as Micron, Kaynes, and CG Semi have already commenced production in Sanand, fostering an ecosystem where specialized firms, chemical producers, testing labs, and design centers are expected to emerge, creating numerous jobs and transforming the regional economy.