Sahasra Semiconductors is planning to invest Rs 750 cr to set up a memory chip unit

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Electronics company Sahasra Semiconductors has announced it will be the first to set up a memory chip assembly, test and packaging facility in the country and will start selling locally made chips by December.

Sahasra Semiconductors Chairman and CEO Amrit Manwani told PTI that the company plans to invest a total of Rs.750 crore to set up the unit in Bhiwadi in Rajasthan.

“We will invest Rs 150 crore in the construction of ATMP facility at Elcina manufacturing cluster in Bhiwadi, Rajasthan this financial year. We expect it to be operational by the end of this year. Once the market is established and we reach the turnover range of Rs 250-300 crore then we will invest again Rs 600 crore. In total, we plan to invest Rs 750 crore initially,” Manwani said.

He said the company’s first full year of commercial production is expected to generate sales of around Rs 50 crore, which is expected to grow to Rs 500 crore by 2025-26.

Semiconductors are processed in ATMP units (Assembly, Testing, Marking and Packaging) into a complete product ready for sale. This is the next step after the wafers or chips have been manufactured in a fabrication facility.

Manwani said the company has already invested Rs 60 crore in the current fiscal year and will complete the investment of Rs 75 crore by March 2023. The remaining Rs 75 crore will be invested in 2023-24.

The company has invested extensively in purchasing equipment and setting up clean room facilities required for semiconductor packaging.

“We expect the first kit to leave Singapore this week and arrive at our facility in mid-August. Many gears will arrive between August and September. We expect to conduct trial runs in November and be able to commercialize production by December of this year,” Manwani said.

Sahasra Semiconductors is one of the companies whose proposal to establish an ATMP entity has been approved under the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) of the Manufacturing Incentive Scheme.

Manwani said the company was in business after importing semiconductors but has now decided to dive into semiconductor packaging as domestic market growth opportunities arise from government policies, geopolitical situation and security concerns.

He said that Sahasra Group sold memory products for a Japanese and a US-based tech company, but after exiting memory products in India, the company started selling products under its own brand name.

“The demand for storage products has been identified. Not only will we use the semiconductors for our own consumption, we will give them to brands that ask for them. We were one of the major players in the memory segment. We have supplied USB sticks, SD cards and also solid state drives for the computer segment,” Manvani said.

He said aggregate demand for semiconductors is around Rs.7,000-10,000 and the company is confident of reaching a 5-7 percent market share by 2025-26.

“There is tremendous demand for domestically manufactured products, both from OEMs and the retail market. People are looking for domestically made products amid dollar volatility, India-China standoff and US-China standoff. People want an alternative source to China. We believe that customers will definitely welcome domestically made memory semiconductors,” Manvani said.

He said that locally manufactured storage products are preferred by companies for security reasons, since storage products are also installed in data servers, high-end industrial PCs, as well as in communication devices.

“Both the government and private organizations want these things to be made locally,” Manwani said.

(Only the headline and image of this report may have been edited by Business Standard contributors; the rest of the content is auto-generated from a syndicated feed.)

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