India Approves $360M for AI Chip Assembly Venture

The Indian government has approved a substantial investment of $360 million to support a chip assembly facility through a collaboration between Japan's Mitsui & Co, Aoi Electronics, and local partner Kaynes Semicon. This initiative, part of the broader Semicon India Programme, aligns with the government's goal to bolster the semiconductor manufacturing ecosystem, with total planned investment of around $8.2 billion across various projects in India. Operations are expected to commence in the latter half of 2026 following the local approval granted to Kaynes in September 2024.

The strategic partnership with Mitsui will enable Kaynes to handle raw materials from Japanese suppliers, thus enhancing India's capabilities in semiconductor manufacturing. This development is significant as it fosters greater independence in AI chip production, reducing reliance on foreign sources. By establishing a robust local assembly unit, India aims to strengthen its position within the global semiconductor supply chain and enhance its national autonomy in critical technologies, particularly relevant to AI applications.