Understanding Suchi Semicon’s $100 Million Journey into Semiconductor Manufacturing
 

Introduction

In a bold and determined move, Gujarat-based Suchi Semicon has commenced semiconductor production, demonstrating resilience and foresight by initiating operations without awaiting the Centre’s incentives. The company has outlined an ambitious plan to invest $100 million over the next three years. This landmark initiative signals a new chapter in India’s semiconductor journey and underscores the company’s commitment to self-reliance and innovation.

A Vision Beyond Incentives

Ashok Mehta, the founder of Suchi Semicon and chairman of the Suchi Group, emphasized that the company’s business strategy is not primarily driven by incentives. “We have a foolproof business plan. Our business plan is not primarily for incentives. We have set up a plant to do business,” he stated. While Suchi Semicon has applied for the Centre’s incentives under the SPECS scheme and the India Semiconductor Mission, the company has prioritized production readiness over waiting for approvals.

The state government’s approval of a 20% incentive for the plant further strengthens Suchi Semicon’s financial framework, while the Centre’s support remains under consideration. Mehta revealed that the inspiration for the venture stemmed from Prime Minister Narendra Modi’s call during the COVID-19 pandemic to turn crises into opportunities.

Funding the Future

Suchi Semicon’s initial funding comes from a combination of resources, including funds diverted from its established textile business, a funding round involving friends and family, and a credit facility secured from Punjab National Bank. The company’s $100 million investment plan also factors in future incentives from the Centre, which the management remains optimistic about securing.

Operational Milestones and Client Readiness

Trial production is already underway, and the company’s components are currently undergoing testing by clients. With a focus on exports, Suchi Semicon’s first commercial shipments are slated to begin in the first quarter of the next financial year. Co-founder Shetal Mehta shared that the testing timelines vary by application, with approval processes ranging from two weeks to several months.

Looking ahead, Suchi Semicon plans to expand into power semiconductors in the next phase, potentially starting as early as the next financial year.

The Path to Centre’s Incentives

Two critical conditions set by the Centre for incentives under the India Semiconductor Mission are a proven technology partnership and sector experience. Shetal Mehta disclosed that the company is in advanced discussions with potential technology partners and expects to finalize a memorandum of understanding soon. These partnerships will not only bolster the company’s technological capabilities but also enhance its eligibility for incentives.

Building a Skilled Workforce

With a team of 60 members, including seasoned semiconductor professionals, Suchi Semicon is preparing for future growth by investing in employee training. “Semiconductors are a new-age business, and the future is of semiconductors across various domains,” Shetal Mehta noted, highlighting the surging demand for semiconductors in industries like automotive and technology.

Conclusion

Suchi Semicon’s foray into semiconductor manufacturing represents a pivotal moment for India’s technological aspirations. By prioritizing production over incentives and demonstrating a clear vision for growth, the company is setting an example of resilience and innovation. As it advances toward commercial shipments and secures critical technology partnerships, Suchi Semicon’s journey promises to contribute significantly to India’s emergence as a global semiconductor hub.

Courtesy by: economictimes