Sanand 2.0's swift semicon wave accelerates India's chip ambitions

How the authomotive hub is providing semiconductor companies exactly what they need - speed

American semiconductor major Micron, which started its chip assembly, testing, monitoring and packaging (ATMP) facility in Sanand, Gujarat, a few days ago, had speed in mind while deciding the location of its India plant. The Idaho-headquartered company, which has plants across the world, had two options in India — Dholera and Sanand in Gujarat — both of which are developing as manufacturing hubs.

 

At one point, it seemed like Micron might opt for Dholera, which was being promoted as a semiconductor city. Yet, in a 2023 announcement, the firm, known for Dynamic Random Access Memory (DRAM) and NAND (storage technology) wafers, named Sanand GIDC (Gujarat Industrial Development Corporation) as its chosen destination.     

 

The inauguration of the Micron facility last week placed India on the global semicon map. Locals see it as a new industrial revolution, tracing Sanand’s journey from the Tata Nano plant, the fulcrum of its industrialisation in 2008, to the Micron facility, now its centrepiece. Industry heavyweights in the region are calling it a shift from Sanand 1.0 to Sanand 2.0, with the focus firmly on semiconductors now.

 

Besides Micron, there is CG Semi and Kaynes Technology. Both have set up outsourced semiconductor assembly and test (OSAT) facilities in Sanand, some 50-minute drive from the Ahmedabad international airport. Many other semiconductor projects are coming up in the complex that spans some 2,200 hectares (22 million sq metre), housing 54 multinationals and 600 micro, small, and medium enterprises (MSMEs).

 

A look back at how the semicon story started in Sanand, primarily an automotive hub, shows how its infrastructure and logistics provided the speed the industry was hungry for.                       

 

When this writer was in Dholera in May 2024 to report on how the semiconductor city was shaping up, executives on site called Micron’s choice of Sanand a setback for them, explaining that the company was in a hurry to start its India business. The Sanand ecosystem and infrastructure were already there and Micron could just plug and play. In contrast, Dholera was still warming up.

 

A recce of the Sanand manufacturing hub during the Gujarat trip two years ago definitely meant a stopover at the Micron facility, as the US company seemed to be the defining theme of the place at that point. It had just made an entry.  The guide, a government official (and a regular at manufacturing hubs like Dholera and Sanand), cautioned that the Micron stop should neither be long nor from very close quarters as the company was extremely particular about the confidentiality of every aspect of business. It was also about not losing any time. Workers and contractors at the construction site seemed to comply fully with that spirit.

 

Less than two years later when the plant was inaugurated, the guarded approach at the Micron site, when this writer had visited earlier, rang a bell. It boiled down to the speed of doing things. Speaking at a conference after the launch, Sanjay Mehrotra, chairman, president and chief executive officer of Micron Technology, said, “In semiconductors, the supply chain must move at the speed of light.”

 

Mr Mehrotra added that proximity matters, as do local presence and local end-support and services. When the equipment is down, we need spare parts immediately, as speed is the competitive advantage in this era, he went on to say. “We encourage our partners to think about how you deepen and expand your footprint here in

 

India, closer to where the action is.”

 

Indeed, for companies to be able to do things at speed, the ecosystem has to cooperate. Sanand, just 22 km away from Ahmedabad, is offering that support. The city, which falls under the Gandhinagar constituency, represented over the years by leaders such as Amit Shah and L K Advani, is about to have its first five-star hotel and construction of another could start soon.

 

To make Sanand an investor-friendly place, the authorities have focused on constructing quality meeting venues and golfing zones. For leisure, plenty of one-day picnic spots have mushroomed in and around Sanand, in addition to dedicated spaces for box cricket and pickleball, as a road journey to the city would show. The clincher for Sanand, however, remains its proximity to big cities and to the Ahmedabad international airport.

 

More recently, however, arrests for consuming alcohol at a party in the city (as part of a dry state policy) have grabbed headlines. That apart, gaps still exist in the Sanand ecosystem, with a dearth of skilled labour being a top concern. To address this issue, the government and the industry have been collaborating. The absence of adequate local transportation is another problem for investors and the local community.

 

Despite the hurdles, Sanand’s infrastructure and logistics offer an advantage to industry and investors compared with Dholera SIR (Special Investment Region), which is located some 100 km from Ahmedabad. The expectation is that Tata Electronics, which has a semiconductor facility in Dholera, will be able to anchor the manufacturing hub, much like what Nano did many years ago and what Micron is doing now to Sanand.

 

The hope is that an airport in Dholera, likely this year, will make a difference, and speed will not have to take a backseat. Infrastructure creation will be even more critical ahead of the Commonwealth Games in the state in 2030.