The Union Cabinet has approved the establishment of a new semiconductor manufacturing facility under India's Semiconductor Mission. In a significant move to augment the country's manufacturing capabilities, economic resilience and create a strong Semiconductor Ecosystem ,the new unit will be established near Jewar airport, Uttar Pradesh. A joint venture between HCL Group and Taiwan's Foxconn amounts Rs 3,706 crore.. It marks the sixth plant under the India Semiconductor Mission (ISM). The Center’s decision to open the unit in Uttar Pradesh perfectly aligns with the state government’s plan to become a major semiconductor manufacturing hub of north India. Scheduled to commence operations in 2027, the factory is expected to manufacture 36 million display driver chips annually, supplying mobile phones, laptops, cars, and other electronic gadgets.

Call for Self-Reliant Manufacturing Growth

Often we see MSMEs face challenges due to the high cost and limited availability of semiconductors, the crucial components in various electronic products. This rising raw material cost and global supply chain delays severely impacts the electronic assembly, precipitating production halts and reduced operations. Further cascading the employment and revenue.

Establishment of the new semiconductor unit in Jewar aims to alleviate these challenges by:

• Reducing import dependence and ensuring a more stable domestic supply of semiconductors.

• Lowering component costs through local manufacturing, making inputs more affordable.

• Facilitating innovation by providing MSMEs access to advanced technology, enhancing their competitiveness in domestic and global markets.

Bolstering Semiconductor Supply for MSME 

The vulnerabilities exposed in international supply chains and Global trade disruptions, such as the 2021–2023 supply chain crisis have highlighted self dependency in the sector. To prevent Indian MSMEs, particularly in electronics and manufacturing from slower production, increased storage costs, missed delivery deadlines and adverse industry effects worldwide, we have to enlarge semiconductor manufactuing reduce our heavy reliance on imports.

With a new Semiconductor manufactuingunit near Jewar Airport in Uttar Pradesh, MSMEs now have a strategic opportunity to better shield themselves from future disruptions.

• Access to domestically manufactured semiconductors can prevent over-leaning of MSMEs on volatile international markets. Diversification will minimize the impact of geopolitical tensions, shipping delays, and foreign policy changes on their production timelines and eventually enhance productivity.

• The newly announced unit will allow MSMEs to take advantage of smaller lead times, improved planning for inventory, better deliveries, thereby decreasing operating costs and enhancing service levels.

• Consistent serving of markets will empower MSMEs to strengthen their long-term growth and sustainability even during global crises.

What to Expect

The upcoming semiconductor facility can be a game changer for India’s manufacturing sector, especially for Indian MSME. It is more than infrastructure—it’s a critical tool for navigating global uncertainties. This unit can enable us to leverage local supply, improve logistics, and reduce external vulnerabilities and contribute in making ofa a strong demestic semiconductor ecosystem. It is a strategic advantage for Indian MSMEs to build resilient, future-ready business models and eventually contribute to Make in India Mission.