Gujarat textile exporter seeking to assemble chips is racing against time

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Subscribe to enjoy similar stories. New Delhi: For two decades, Ashok Mehta has been exporting textiles from his Suchi Industries Ltd. in Surat, Gujarat, generating a revenue of about ₹30 crore in FY23.

Then he surprised many by floating a new venture: Suchi Semicon. Mehta said it has bagged subsidies from the state to set up a $100 million (about ₹840 crore) chip testing factory. Driven by incentives for semiconductors, industry experts say, more such companies may be lining up despite lacking related experience or expertise.

“When I saw supply-chain disruption during the pandemic, I realized that there is a clear opportunity to diversify into the semiconductor industry," Mehta told Mint. “I then leveraged my network of vendors in the US and Malaysia, which I’d built through my textile exports over the past three decades—and finally identified Malaysia as the ideal geography with the right talent and team." Suchi Semicon will set up an outsourced semiconductor assembly and testing (OSAT) factory in Surat, Mehta said. He plans to start rolling out chips by the end of this year, and targets to assemble 3 million units a day once the full facility is up and running.

Other similar projects approved by the central government aim to make 2 to 10 times more. Mint’s emailed queries to the Gujarat Semiconductor Mission and Department of Information Technology, seeking details on how companies, including Suchi Semicon, are selected for subsidies remained unanswered. “I have currently financed ₹200 crore through personal assets, and bank guarantees and financing.