Union Minister for Electronics and IT Ashwini Vaishnaw virtually inaugurated India’s first Small and Medium Enterprise (SME)-led semiconductor assembly and testing facility in Bhiwadi, Rajasthan. Developed by Sahasra Semiconductors with an investment of over ₹150 crore, the unit marks a historic milestone in the country’s push for self-reliance in electronic chip manufacturing. The project signifies the expanding footprint of the India Semiconductor Mission beyond large corporations into the vibrant SME sector.
India’s First SME-led Semiconductor Facility: Key Details
The newly inaugurated facility is situated within the Electronics Manufacturing Cluster (EMC) developed by the Electronic Industries Association of India (ELCINA) at Salarpur, Khushkhera, in Bhiwadi, Rajasthan. Developed with an initial investment exceeding ₹150 crore, the plant spans an area of 57,000 sq ft and is equipped with state-of-the-art Class 10K and 100K cleanrooms to maintain the stringent environmental standards required for semiconductor manufacturing.
Managed by Sahasra Semiconductors Pvt Ltd, the unit focuses on the backend assembly and packaging of high-demand memory products. These include Micro SD cards, flash storage devices, LED driver Integrated Circuits (ICs), eSIMs, and Radio Frequency Identification (RFID) products. The facility currently possesses an annual packaging capacity of 60 million units, which is projected to scale up to 400 to 600 million units within the next few years. Notably, the unit has already begun exporting more than 60 percent of its production to major global markets, including the United States, Germany, France, and China.
Decoding ATMP and OSAT: The Backend of Chipmaking
To understand the significance of the Sahasra facility, it is essential to distinguish between the two main stages of semiconductor production. While fabrication (front-end) involves printing complex circuits onto silicon wafers in multi-billion-dollar factories called “Fabs,” the backend stage is where these wafers are converted into usable electronic components.
ATMP stands for Assembly, Testing, Marking, and Packaging. In this process, the raw silicon wafer is sliced into individual chips, which are then connected to pins, tested for performance, laser-marked for identification, and encased in protective shells. OSAT, or Outsourced Semiconductor Assembly and Test, refers to the business model where third-party companies perform these technical backend services for chip designers who do not own their own packaging plants.
Analogy · The Tailoring Analogy Expand analogy
Think of a semiconductor “Fab” as a massive textile mill that produces high-quality silk fabric. ATMP is like a specialized tailoring unit that takes that raw fabric, cuts it into precise shapes, stitches it into a finished garment, and packs it in a protective box. While the fabric (the chip) is the core technology, it is the tailoring and packaging that make it ready for the end consumer to wear (or for a device to use).
Starting with ATMP and OSAT units is a strategic choice for India. While a front-end fabrication plant requires an investment of $5 to $10 billion, backend facilities are less capital-intensive and can be operational much faster. They serve as a critical bridge that completes the local electronics manufacturing ecosystem.
The SPECS Scheme: Driving Electronics Manufacturing in India
The Sahasra Semiconductors facility has been established under the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS). Launched by the Ministry of Electronics and Information Technology (MeitY) on April 1, 2020, the scheme is a cornerstone of India’s strategy to become a global hub for Electronics System Design and Manufacturing (ESDM).
The SPECS scheme provides a financial incentive of 25 percent on capital expenditure for the manufacturing of goods that form the downstream value chain of electronic products. This includes electronic components, semiconductor fabrication units, and ATMP/OSAT facilities. The primary objective is to offset the “disability” or cost disadvantages faced by domestic manufacturers compared to global competitors. IFCI Limited, a government-owned non-banking finance company, serves as the Project Management Agency (PMA) responsible for implementing the scheme and disbursing incentives.
By supporting companies like Sahasra, the government aims to move beyond simple assembly to high-value manufacturing. This approach not only attracts large-scale investments but also encourages the growth of a local supply chain, reducing the heavy reliance on imported electronic components.
Strategic Significance: Building a Self-Reliant Semiconductor Ecosystem
The inauguration of the Sahasra facility is a pivotal moment for the India Semiconductor Mission (ISM), which was approved by the Union Cabinet in December 2021 with a massive financial outlay of ₹76,000 crore. While global giants like Micron are setting up massive units in Gujarat, the success of an SME-led project like Sahasra demonstrates that India’s semiconductor ambitions are inclusive and broad-based. It proves that domestic small and medium enterprises can also compete in high-precision technology sectors.
Beyond technical achievements, this facility plays a crucial role in India’s broader economic goals. Electronics currently ranks as one of India’s largest import categories, and localizing the assembly and testing of chips is vital to reducing the national import bill. Furthermore, the unit is expected to generate significant employment for skilled engineers and technicians, contributing to the development of a high-tech workforce.
The choice of Bhiwadi also aligns with the recently introduced Rajasthan Semiconductor Policy 2026. The state government aims to leverage its proximity to the Delhi-NCR region to transform Rajasthan into a hub for electronics manufacturing. By providing a conducive environment for such projects, the policy seeks to attract further investment in the semiconductor supply chain, ranging from raw materials to finished products.
Key Takeaways
- India’s first SME-led semiconductor ATMP facility was inaugurated in Bhiwadi, Rajasthan, by Union Minister Ashwini Vaishnaw.
- The facility has been established by Sahasra Semiconductors Pvt Ltd with an investment of over ₹150 crore in the Salarpur industrial hub.
- The project is supported under the SPECS scheme, which offers a 25 percent financial incentive on capital expenditure for electronic component manufacturing.
- ATMP stands for Assembly, Testing, Marking, and Packaging, representing the critical backend stage of the semiconductor value chain.
- The India Semiconductor Mission (ISM) was launched in December 2021 with a financial outlay of ₹76,000 crore to build a domestic chip ecosystem.
- IFCI Limited acts as the Project Management Agency (PMA) for the implementation and appraisal of projects under the SPECS scheme.
