Suchi Semicon opens chip factory without central incentives, plans to invest $100 million in 3 years

Surat, Dec 15 (PTI) Gujarat-based Suchi Semicon has started manufacturing semiconductors without incentives from the Center and plans to invest $100 million in three years, a senior official said on Sunday.

Ashok Mehta, chairman of Suchi Group and founder of Suchi Semicon, said that although the company has applied for incentives from the Center under SPECS (Scheme for Promotion of Electronic Components and Semiconductor Manufacturing) and the Indian Semiconductor Mission, it does not want to retain the incentives in order to retain production .

“We have a complete business plan. Our business plan is not primarily for incentives. We have set up a factory to do business. When we meet their requirements, the Center will approve it. We have already made $100 million (approx. $The investment plan is Rs 840 crore within three years,” Mehta said.

He said the state government has approved a 20% incentive for the plant.

“During the COVID-19 pandemic, there was a shortage of semiconductors and Prime Minister Modi asked us to turn the crisis into an opportunity. We made up our minds to enter the semiconductor business at that time. After some consideration, we decided to open a factory. We conducted research with industry experts,” Mehta said.

He is also the founder of textile company Suchi Industries.

“We already have requests from customers. Most of our production will be for overseas customers. We have started trial production for some time and our components are being tested by customers,” Mehta said.

The company has used some of the money from its textile business and raised a round of funding from friends and family, he said.

“We are also partnering with Punjab National Bank for credit facilities. Our investment plan also includes incentives that we are confident of getting from the Center based on our performance,” Mehta said.

Suchi Semicon co-founder Shetal Mehta said commercial shipments of the semiconductor will begin in the first quarter of next year.

“Once testing is complete, commercial shipments will begin. Some applications using our components will take 2 weeks to test and approve, and some may take 3-4 months. We expect commercial shipments for most applications to begin from the first Quarter starts,” Sheetal said.

He said the company plans to enter power semiconductors in a second phase of expansion, possibly as early as the next financial year.

Talking about the approval for the centre, Sheetal said the company is in advanced stages of discussions with technology partners and is expected to sign a memorandum of understanding soon.

“The government wants us to have a complete back-up plan to avoid any adverse impact on the business. The technology partnership will further enhance our business profile. Once we have the technology partner, the Center will also sanction our factory in India incentives under the Semiconductor Mission,” Sheetal said.

He said that the center has two conditions, one is a technical partner and the other is industry experience.

“We are starting production at the factory. I am sure the Center will also consider our performance as one of the criteria for approving incentives,” Sheetal said.

He said the company has a team of 60 people, some of whom have extensive experience in the semiconductor field.

“We are still training more employees before expanding production scale. Semiconductors are a new era business, and the future is semiconductors across various fields. In ordinary cars, customers will be exposed to about 600 types of semiconductors, and in electric cars As the demand for technology grows, the demand for semiconductors will also grow exponentially,” Shetal said.

He said the Suchi Group has established linkages with various industries through its textile business and people in the technology field have started to gain confidence in India’s ability to produce semiconductors.