From textiles to chips: Suchi Semicon targets 3 million packaged chips daily after ISM approval

Based in Surat, Suchi Semicon is poised to revolutionize its semiconductor packaging capabilities, aiming to reach an impressive output of nearly 3 million chips per day within the next three years. This ambitious plan follows the recent endorsement from the Cabinet under the India Semiconductor Mission (ISM). The company’s outsourced semiconductor assembly and test (OSAT) facility in Gujarat has received approval as part of ISM 1.0, with a significant investment plan totaling around ₹868 crore. Suchi Semicon's operations will support various sectors such as power electronics, automotive systems, consumer electronics, and more. What sets Suchi Semicon apart is its proactive approach; the company had already launched a pilot packaging line before the formal government approval was granted. Currently, they are successfully packaging approximately 150,000 chips daily, with plans to scale up to between 300,000 to 500,000 chips as additional equipment is integrated. The firm is not just waiting for approvals; it has already shipped its first batch of packaged chips to a U.S.-based client for qualification. With certification from a European audit firm on the horizon, Suchi Semicon anticipates ramping up its commercial packaging operations shortly. The company's customer base spans across the U.S., Korea, Japan, and Taiwan, including a significant partnership with Japan's ROHM Semiconductor, under which Suchi will package wafers provided by ROHM. In terms of infrastructure investment, Suchi Semicon has already allocated around ₹120 crore over recent years to develop its facilities. Although these investments were made prior to ISM’s formal endorsement, they will qualify for a 20% incentive from the Gujarat government after reimbursement claims. Looking ahead, the next phase of expansion is contingent on Cabinet clearance, with plans for an additional ₹868 crore investment that will be eligible for incentives, including 50% support from the Central government and 20% from Gujarat. This year alone, the company intends to invest nearly ₹200 crore and has placed equipment orders worth approximately ₹50 crore from suppliers located in Japan, Singapore, and Malaysia. Suchi Semicon's journey into the semiconductor industry is quite unconventional. Originally entrenched in the textile sector, the company pivoted to mask manufacturing during the Covid-19 pandemic, becoming one of the largest producers in Surat. The disruption caused by the global chip shortage during the pandemic piqued their interest in semiconductors, prompting founder Ashok Mehta to explore opportunities in Malaysia, where discussions with industry experts solidified their decision to enter this field. To bridge the technology gap, Suchi Semicon has focused on hiring seasoned professionals from Malaysia's semiconductor sector, including a CEO with extensive industry experience. Currently, the company employs around 100 engineers, with plans to expand this workforce to approximately 1,200 as production increases. Notably, the approval of their project further enhances Gujarat's reputation as a pivotal hub for India's semiconductor manufacturing ambitions, bringing the total number of ISM-approved projects to 12, with Gujarat leading in proposed investments.