Surat’s Suchi Semicon, a subsidiary of Suchi Industries Ltd, has launched a semiconductor packaging and OSAT unit in Gujarat, claiming it to be India’s first domestic facility in this domain. With the government’s vision for a robust semiconductor ecosystem, Ashok Mehta and Shetal Mehta discuss with EFY’s Nijhum Rudra how their Rs 8.7 billion, five-year investment aims to position India as a global semiconductor leader.
Q. Being a textile industry veteran for decades, why have you embarked on the semiconductor industry?
A. Coming from a background in the textile industry, I never imagined a shift into semiconductors. Yet, as the world became more connected and technology advanced, I saw an opportunity to contribute in a new and vital way. The COVID-19 crisis opened our eyes to a global dependency on essential resources, which began with us producing medical masks to support immediate needs. But this experience highlighted a more significant, pressing challenge: the critical role of semiconductors and India’s untapped potential in this field. Inspired to make a difference, we established a robust outsourced semiconductor assembly and test (OSAT) facility, driven by a vision to help position India as a technology leader and self-reliant. With the government’s support, we are building a future where innovation thrives. Today, I am proud to employ around 1000 people at Suchi Industries, which will grow as we embark on this journey with Suchi Semicon.
Q. From a textile background with no prior experience in electronics, how will you plan to oversee the operation?
A. My experience in the textile industry has provided me with valuable insights into manufacturing processes, supply chain management, and quality control—all applicable in the semiconductor industry. Leveraging this expertise, I aim to bring efficiency, reliability, and innovation to semiconductor manufacturing in India.
The approach will be multifaceted in terms of developing the semiconductor industry in India. Firstly, I plan to focus on building strategic networks with global semiconductor companies. Secondly, I will prioritise talent development and skill enhancement initiatives to nurture a skilled workforce capable of meeting the demands of the semiconductor industry. This includes collaborating with academic institutions to offer specialised semiconductor engineering and manufacturing training programmes. I have done thorough research for three years. The semiconductor industry mainly concentrates in Thailand, the Philippines, Malaysia, Taiwan, and China. We hired skilled and efficient people globally; they have been working with me for two years.
Q. When are you exactly planning to start your OSAT unit?
A. Operations will begin in late November, and the final production dates will follow soon.
Q. On what basis do you claim to be India’s first ATMP unit, given Sahasra and Micron’s milestones?
A. We are an OSAT company, whereas Micron is an assembly testing marking and packaging (ATMP) unit. Micron is the first company to be approved by the government. Sahasra is also a packaging ATMP company that will start in Rajasthan, but they do it themselves. However, we are the first company in Gujarat to start a semiconductor business. That is correct. Secondly, the Micron operations have not begun yet. It is expected to start by the end of December 2024 or 2025.
Q. What products will you develop in your OSAT unit, and for which verticals? What is your technical team’s experience level in developing these products?
A. At Suchi Semicon, our products are small outline packages, power packages, and quad flat no-leads (QFNs). Our technical team has two to three decades of experience. We are building a more extensive, experienced team because operations will start in November. They have also worked in OSAT units outside India.
Currently, most technical personnel are hired from outside India because no academic courses are available in our country for this industry. However, over time, the technical team will train Indian personnel and improve the skills of Indian students and employees.
Q. From where have you sourced and purchased your equipment, and at what cost? Have you received any subsidy from the government?
A. The equipment is not purchased from any particular country. Depending on the category of the machines, we have selected our vendors. We have chosen machines that are best in their category. The investment is not just for our success but also for the success of India. That is why we have chosen all the best equipment vendors worldwide to make this a success. We cannot disclose the amount invested in the equipment. I hope that India Semiconductor Mission (ISM) approves our application, and with that subsidy, we will reinvest in our company to purchase more top-notch equipment.
Q. How much have you invested in setting up your OSAT unit, and how much Capex and incentives have you received from the government?
A. Our target is US$100 million for the pilot line starting soon. As I said earlier about ISM, we have applied for central and state incentives and await their approval.
Q. Has Suchi Semiconductor invested the entire ₹8.7 billion or formed any partnerships?
A. We did not form any alliances with any companies. We are proceeding in a phased manner, and there is no confirmation of any partnership yet.
Q. Do you think with this level of investment, you can compete with the likes of Tatas and Micron, whose investment is more than ₹910 billion?
A. Tata and Micron are setting up their manufacturing plants. No competition will create a problem for anyone. Moreover, as operations increase, there might also be opportunities or chances for collaboration.
Q. What are the challenges in India’s semiconductor industry? What solutions are needed?
A. India has a firm hold when it comes to designing semiconductors. More than 55,000 people are employed in the electronics design industry since there was no packaging facility in India. These packages were designed in India but assembled elsewhere in the world. With the industry growing, there will be a shift in this pattern. The Indian semiconductor industry indeed has a strong potential to disrupt the global semiconductor supply chain.
Q. How will you handle these challenges, from hiring skilled individuals to maintenance costs?
A. Our top management staff brings wealth from global expertise, and we now have an MoU with the NIT college in Surat. We have already signed the MoU and are also starting the recruitment process from other colleges. They are receiving training from our senior management teams, so there is no challenge in handling this industry.
Q. Have you partnered with Indian or global companies to expand your operations? Do you have any plans for the same?
A. We are in talks and looking for a global technology partner who can guide us in boosting our growth. Therefore, we are looking for global companies willing to come to India for a technical partnership. In India, we have been in touch with a few companies in the semiconductor domain, but due to certain compliance requirements, we cannot disclose the names currently.
