City Spotlight: Sanand, Gujarat—Semiconductor Momentum Meets Industrial Depth

With the back-to-back operationalization of Micron and Kaynes Semicon units, the Sanand industrial cluster is bridging India’s backend semiconductor gap and integrating the region into global electronics supply chains.

Gujarat’s Sanand region’s emergence on India’s semiconductor map is solidified with the inauguration of the Kaynes Semicon facility on March 31, 2026. The launch marks the start of commercial semiconductor operations at the site and signals a tangible shift in India’s manufacturing trajectory.

Developed with an investment of approximately INR 33 billion (US$351.11 million), the facility will handle semiconductor assembly, testing, marking, and packaging. It represents a critical step in strengthening India’s backend semiconductor capabilities under the India Semiconductor Mission (ISM).

Launch of semiconductor manufacturing plant

Sanand’s transformation as a major semiconductor hub has gained renewed momentum in 2026 with the inauguration of two units: Micron’s ATMP (assembly, test, marking, and packaging) facility in February, followed by Kaynes Semicon’s facility in March 2026.

Kaynes’s semiconductor facility will produce advanced Intelligent Power Modules (IPMs) used in automotive and industrial applications requiring efficient power management. As per Kaynes Semicon, the plant’s scalable capacity is expected to exceed 6 million units per day.

India’s Prime Minister, Narendra Modi, takes a walkthrough of the Kaynes Project at Sanand, in Gujarat, on March 31, 2026. Image source: PIB

It must be noted that the Kaynes unit in Sanand operates as an outsourced semiconductor assembly and test (OSAT)/ATMP facility, thereby strengthening India’s backend manufacturing segment. A significant portion of the facility’s output is export-oriented, with supplies linked to global semiconductor companies, including firms based in the United States. This establishes a direct connection between domestic manufacturing and international markets.

Role within India’s semiconductor strategy

The Sanand facility is being developed under the ISM, which seeks to establish a comprehensive semiconductor ecosystem in India. Of the 10 semiconductor projects approved countrywide, Gujarat hosts the largest share with four facilities—three located in Sanand and one in Dholera Special Investment Region (SIR).

Micron’s ATMP facility is focused on memory chip packaging, including DRAM and NAND products used in data centers, mobile devices, and artifical intelligence (AI)-driven applications. It is one of the largest semiconductor investments in India.

In parallel, Kaynes Semicon’s OSAT/ATMP facility focuses on IPMs, which are widely used in electric mobility, industrial systems, and energy-efficient technologies, thereby supporting high-growth domestic and global markets. Notably, the project marks the entry of an Indian-origin electronics manufacturing services provider into semiconductor production.

Together, these facilities demonstrate a dual-track approach to ecosystem development, combining global investment-led scale with emerging domestic manufacturing capabilities.

Strengthening the domestic ecosystem

Notable establishment of semiconductor operations in Sanand addresses a critical gap in India’s value chain, namely, the lack of large-scale domestic packaging and testing infrastructure.

Additionally, the entry of an Indian-origin Electronics Manufacturing Services (EMS) company into semiconductor production broadens domestic participation, which has historically been dominated by multinational firms.

India’s broader semiconductor workforce

India’s engineers constitute a significant share of the global integrated circuit (IC) design workforce, supporting major companies such as Intel, Qualcomm, and AMD.

However, manufacturing capabilities have historically lagged due to gaps in infrastructure, supply chains, and industrial ecosystems. Development of clusters like Sanand represents a strategic effort to address these limitations and reduce dependence on imports.

Capability building through a phased approach

India’s semiconductor development strategy is evolving in phases, with Sanand playing a key role in the initial stages:

1. Near-term focus: Expansion of assembly, testing, and packaging (ATMP/OSAT) capabilities
2. Medium term: Growth in mature-node semiconductor manufacturing aligned with domestic demand
3. Long term: Development of advanced packaging and selective fabrication capabilities

This phased approach allows India to build expertise incrementally while managing capital and technological risks.

Sanand’s industrial foundations

Located in the Ahmedabad district of Gujarat, Sanand is a prominent industrial center. The district itself has long been associated with textiles and diversified manufacturing, providing a strong industrial base for new-age sectors.

Find Business Support

Reach Out to In-Market Experts for Investment Planning or Operational Support

The Gujarat Industrial Development Corporation (GIDC) plays a central role in shaping this landscape, with the Sanand Industrial Estate spanning over 2,000 hectares. This large industrial zone has enabled the region to attract strong investments across sectors, including automobiles, electronics, and now semiconductors.

Location and connectivity

Sanand benefits from strong multimodal connectivity, which enhances its attractiveness for large-scale industrial investments:

1. Proximity to Ahmedabad (approx. 30 km), providing access to an international airport
2. Access to major ports such as Mundra Port (325 km) and Kandla Port (276 km)
3. Connectivity to key rail infrastructure, including the major junction at Vadodara (around 50 km)
4. Nearby urban centres such as Vadodara and Nadiad, supporting industrial workforce and logistics

This connectivity framework supports efficient movement of raw materials, finished goods, and workforce, making Sanand suitable for both domestic and export-oriented industries.

Industrial base and sectoral presence

The Sanand Industrial Estate hosts a broad mix of industries, including:

1. Automobiles and auto components
2. Plastic engineering
3. General engineering and heavy manufacturing
4. Electronics and emerging technology sectors

Find Business Support

Select Your Next Location for Manufacturing in Asia with Tailored Business Intelligence

This diversified industrial base has laid the groundwork for Sanand’s transition into advanced manufacturing segments, including semiconductors.

A key feature of the estate’s development model is its cluster-based zoning approach, which enables industry-specific infrastructure and operational efficiencies. The broader Sanand industrial region is organized into multiple sub-estates, such as:

1. Sanand (RIDC)
2. Sanand Women Park
3. Sanand-II (Bol)
4. Sanand-II (Bol) MSME Park (proposed)

Strategic significance

Sanand’s industrial profile reflects a shift toward integrated, cluster-driven development. Its scale, connectivity, and sectoral diversity make it well-suited to host next-generation industries such as electronics and semiconductor manufacturing. The presence of dedicated zones and specialized infrastructure further strengthens its position as a key industrial and emerging technology hub in India.

ALSO READ: India’s Semiconductor Future Through Skilling and Inclusion

Outlook

Sanand’s evolution into a semiconductor hub signals a broader structural shift in India’s industrial strategy. With investments in backend manufacturing, emerging fabrication projects, and targeted policy support, the region is becoming a focal point in the country’s semiconductor ambitions.

As capacity expands and ecosystem linkages deepen, Sanand is expected to play a pivotal role in integrating India into global semiconductor supply chains—supporting industries such as automotive, electronics, and digital infrastructure while advancing the goal of technological self-reliance.

(US$1 = INR 93.98)

• Previous Article Noida and Greater Noida: Delhi-NCR’s Investment Corridor—IT, Manufacturing, and Jewar Airport
• Next Article