Gujarat’s Higher Investment Thresholds in Semiconductor Sector Keeps State MSMEs Excluded

ENA MSME 2025-01-03 13:58:25 Gujarat, Jan 3 (KNN) The Gujarat governments ambitious drive to position itself as Indias semiconductor hub has attracted significant investments from industry giants, but micro, small, and medium enterprises (MSMEs) remain on the sidelines. With commitments worth Rs 1.26 lakh crore from Tata Electronics, Micron, Kaynes, and CG Power, the state has secured its foothold in the semiconductor industry. Yet, stringent entry conditions continue to deter smaller players. Gujarats semiconductor policy mandates a minimum investment of Rs 50 crore for OSAT (outsourced semiconductor assembly and test) plants and up to Rs 20,000 crore for fabrication units. Industry insiders say these high thresholds create significant barriers for cash-strapped MSMEs, compounded by a lack of incentives for research and development. Pankaj Yadav of PDEU notes that MSMEs face added challenges due to the specialised nature of semiconductor manufacturing, particularly in advanced technologies like nanochips. To foster MSME participation, the ecosystem should also promote microchip production, which aligns better with their capabilities, Yadav suggests, reported FE. Government officials remain optimistic. Mona Khandhar, Principal Secretary, DST, highlights niche areas such as substrate and power semiconductor manufacturing as potential avenues for MSMEs. Medium and small enterprises must conduct thorough financial analyses and focus on competitive, updated technologies. Larger projects can create pathways for MSMEs through contracts and local sourcing, she said. However, MSMEs like Suchi Industries face hurdles even after diversifying into semiconductors. Its OSAT facility, Suchi Semicon, is still awaiting approval for capital support under the Centres SPECS incentive and ISM funding. Weve started production using private funds and bank loans, but await crucial government backing, said Ashok Mehta, MD, Suchi Semicon. Meanwhile, the Gujarat State Electronics Mission (GSEM) is simplifying processes for large players. We offer incentives such as land, power, water subsidies, and swift clearances, said Manish Gurwani, GSEMs Mission Director, citing Tatas USD 11 billion fab plant approval within 24 hours. Experts assert that while Gujarats policy has catalysed marquee investments, MSME participation will require a recalibration of incentives and support structures to unlock their potential in this high-stakes sector. (KNN Bureau) 40491 https://knnindia.co.in/news/newsdetails/msme/gujarats-higher-investment-thresholds-in-semiconductor-sector-keeps-state-msmes-excluded 2025-01-03 13:58:25 knnindia.co.in Gujarat’s Higher Investment Thresholds in Semiconductor Sector Keeps State MSMEs Excluded