From textiles to chips: Suchi Semicon targets 3 million packaged chips daily after ISM approval

Surat-based Suchi Semicon aims to scale its semiconductor packaging operations to nearly 3 million chips per day within the next three years, following Cabinet approval under the India Semiconductor Mission (ISM).

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The company’s outsourced semiconductor assembly and test (OSAT) facility in Gujarat was approved under ISM 1.0 with a proposed investment outlay of around Rs 868 crore. The facility will cater to sectors including power electronics, analogue integrated circuits, automotive systems, industrial applications and consumer electronics.

What makes Suchi Semicon stand out among several approved semiconductor projects is that the company says it had already operationalised a pilot packaging line even before receiving formal government approval. While many semiconductor projects under ISM are still at the construction or equipment procurement stage, Suchi claims it is already packaging chips.

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“The pilot line is already running successfully and we are currently packaging around 1.5 lakh chips daily,” Ashok Mehta, founder and chairman, Suchi Semicon, told Business Today. “Over the next few months, we expect to scale this to around 3 lakh to 5 lakh chips per day as additional equipment comes in.”

The company now plans a far larger scale-up over the next three years as it adds production lines and expands customer engagements.

Awaiting certifications, customer ramp-up

Even before receiving official approval, Suchi Semicon had shipped its first batch of packaged chips to a US-based customer for qualification last year. The company is currently awaiting certification from a European audit firm, after which it expects to begin commercial packaging operations at scale. 

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The company claims to have customers across the US, Korea, Japan and Taiwan. One of its key partnerships so far is with Japan’s ROHM Semiconductor, with which it has signed a memorandum of understanding for semiconductor packaging. Under the arrangement, Suchi Semicon will receive wafers from ROHM for packaging.

Overall, the company says it has identified more than 20 customers and already secured purchase orders from nine.

Expansion plans underway

Suchi Semicon said it has already invested around Rs 120 crore over the past few years to establish infrastructure and pilot operations. Since these investments were made before formal approval under ISM, the company will only be eligible for a 20% incentive from the Gujarat government after reimbursements are claimed.

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The next phase of expansion is expected to begin after Cabinet clearance. The company plans to invest another Rs 868 crore in the coming years, which will qualify for incentives on a pari passu basis, including 50% support from the Centre and an additional 20% from the Gujarat government. 

As part of this roadmap, Suchi plans to invest nearly Rs 200 crore this year alone and has already placed equipment orders worth around Rs 50 crore from suppliers in Japan, Singapore and Malaysia. 

“I had placed the order 3 months back and I am expecting them to arrive in May or early June,” Mehta said. 

An unconventional semiconductor journey

Suchi’s entry into semiconductors came from an unlikely starting point. The group originally operated in the textile business in Surat before expanding into mask manufacturing during the Covid-19 pandemic, where it emerged as one of the city’s largest mask producers. 

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Mehta said the company became interested in semiconductors after witnessing the global chip shortage disrupt industries such as automobiles and electronics during the pandemic. He later travelled to Malaysia, where industry interactions and meetings with semiconductor experts convinced him to enter the sector despite having no prior experience in technology manufacturing. 

Suchi Semicon subsequently opened a backend office in Malaysia, onboarded semiconductor veterans with decades of industry experience, and began constructing its Surat facility after more than a year of research and preparation.

Building semiconductor expertise

Recognising the technology gap early, the company focused on hiring experienced professionals from Malaysia’s semiconductor ecosystem. The company said its CEO is a semiconductor industry veteran overseeing day-to-day operations.

“We also have one Japanese semiconductor industry veteran on our advisory board who guides our top leadership,” Mehta added. 

Suchi Semicon currently employs around 100 engineers working on pilot operations and packaging processes. The company expects its workforce to eventually expand to around 1,200 engineers as production ramps up. 

“One year back, we hired engineers from top universities like IIT Bombay, SVNIT Surat, Nirma University, Ahmedabad,” Mehta said. 

While the company did not disclose the identity of its technology partner, semiconductor projects approved under ISM are typically required to demonstrate access to technical know-how and process expertise before receiving government clearance. 

The approval also strengthens Gujarat’s position as the centrepiece of India’s semiconductor manufacturing ambitions. With the latest approvals, the total number of projects cleared under ISM has risen to 12, with Gujarat accounting for a significant share of the proposed investments.