Odisha targets three more players to expand semiconductor cluster

The state is positioning itself around compound semiconductors, advanced packaging and supporting infrastructure, while seeking to create a specialised manufacturing ecosystem aligned with rising demand from EVs, defence and power electronics.

Odisha is reportedly looking to attract at least three more outsourced semiconductor assembly and test (OSAT) and assembly, testing, marking and packaging (ATMP) companies as it seeks to develop a wider semiconductor manufacturing ecosystem in the state.

Hemant Sharma, Additional Chief Secretary, Industries and Home Department, Odisha, said the state is also targeting printed circuit board (PCB) manufacturers and companies working with advanced materials such as gallium nitride (GaN) and silicon carbide (SiC).

The strategy comes as India enters the next phase of its semiconductor push following the Union Cabinet’s approval of Semicon 2.0 in July. The programme carries an outlay of Rs 1.27 lakh crore and expands the focus beyond semiconductor fabrication and packaging to include manufacturing equipment, materials, specialty gases and other critical parts of the supply chain.

Six projects under development

According to the Odisha government, six semiconductor projects with a combined investment of Rs 14,795 crore are currently coming up in the state. These include RIR Power Electronics, SiCSem, Silelectric Semiconductor Manufacturing, Heterogenous Integration Packaging Solutions, Sancode Semi and ASP Semicon.

Sharma said RIR Power Electronics has already begun operations, while the other projects are progressing through construction and development stages.

Instead of directly competing with states such as Gujarat and Uttar Pradesh for highly capital-intensive silicon wafer fabrication plants, Odisha is positioning itself around specialised semiconductor segments. The state’s focus includes compound semiconductor technologies such as SiC and GaN, along with advanced packaging.

Projects such as SiCSem and 3D Glass Solutions are aligned with this strategy, with potential applications across electric vehicles, defence, power electronics and other sectors expected to drive semiconductor demand.

“If we target fab, we may not be successful, but if we target this mid segment, the sweet spot is, let's say, about Rs 100 crore to Rs 500 crore,” Sharma said.

He said a large number of companies operating in this investment range could collectively address a substantial portion of the market, despite having a lower global profile than major semiconductor companies.

Building infrastructure around the cluster

Sharma said many of these businesses may not have the visibility associated with companies such as Micron or Nvidia, but they could play an important role in reducing India’s dependence on imported semiconductor components and related products.

Odisha is simultaneously working on infrastructure intended to support companies entering the sector. Its plans include a 250-acre semiconductor-focused special economic zone, common testing facilities and efforts to attract suppliers of specialty gases and chemicals.

The state is also in discussions with industrial gas companies including Linde, INOX and Air Liquide. However, establishing a local supplier ecosystem remains challenging because specialty-gas and chemical manufacturers typically require a sufficiently large customer base to justify local facilities.

Sharma said the experience from Odisha’s initial semiconductor investments has highlighted the importance of developing a cluster rather than relying on isolated projects.

“We need to have a cluster of mother industries before such ancillaries become viable,” he said.

The state’s current approach therefore seeks to develop semiconductor manufacturing alongside its supporting ecosystem, with additional OSAT and ATMP players, PCB manufacturers, materials companies and suppliers forming the next layer of Odisha’s planned electronics and semiconductor cluster.