#India #CG Power #OSAT Facility #India Semiconductor #Sanand, Gujarat

CG Power's New OSAT Facility in India

CG Power and Industrial Solutions, in collaboration with CG Semi Private Limited and the India Semiconductor Mission, have secured substantial governmental fiscal support to establish an OSAT (Outsourced Semiconductor Assembly and Test) facility in Sanand, Gujarat. This agreement, reported on January 23, 2025, outlines a subsidy amounting to INR 35.01 billion (approximately USD 404.09 million) to cover 50% of the necessary capital expenditure (capex) deemed eligible for the project. This financial backing underscores the government's commitment to accelerating India's transformation into a global semiconductor hub.

The project is part of a broader strategy set forth by the Indian government to strengthen its semiconductor designs and manufacturing capabilities. In 2024, CG Power had already unveiled plans for a joint venture involving Japan's Renesas Electronics and Thailand's Stars Microelectronics. Collectively, they aim to invest around INR 76 billion (roughly USD 877.20 million) over five years, blending subsidies with equity investments and potential bank loans to ensure the viability and success of the initiative.

The upcoming Sanand facility is designed to significantly contribute to the semiconductor market, with a production capacity of up to 15 million units each day. This output will support various sectors including automotive, consumer electronics, industrial applications, and 5G technology, thereby offering a comprehensive portfolio of products ranging from traditional to advanced semiconductor packages.

S. Krishnan, Secretary of the Ministry of Electronics and IT (MeitY), voiced commendations for CG Power, noting their profound understanding of the semiconductor domain and their progress. He accentuated the importance of domestic intellectual property in driving market growth and expressed confidence that CG Power will play a pivotal role in realizing India's ambitious target of achieving USD 500 billion in electronics production by 2030.

Additionally, Vellayan Subbiah, Chairman of CG Power, highlighted the agreement as a critical milestone for India’s semiconductor landscape. He reiterated the need for Indian companies to foster local brands and ownership of intellectual property while simultaneously driving market demand and establishing solid supply chains locally. Currently, Indians comprise nearly 20% of the global workforce involved in semiconductor design, but there remains a pressing need to grow the domestic ecosystem of manufacturing and innovation.

As India positions itself as a leading player in the global semiconductor industry, this initiative by CG Power marks a significant step towards self-sufficiency and technological advancement. With the government's continuous support, CG Power aims to enhance the country’s capabilities in semiconductor assembly and testing, leading to a sustainable and thriving electronics manufacturing hub.

The establishment of the OSAT facility not only represents a leap forward for CG Power but also reflects India's broader strategy to reduce its dependence on foreign semiconductor solutions. In the coming years, the Indian semiconductor sector is expected to witness exponential growth, driven by both domestic demand and international supply chain factors. The support from the Central Government is a clear endorsement of these efforts, opening doors to further investments and innovations in the sector.

The collaboration with international partners and substantial government subsidies positions CG Power uniquely to catalyze India’s semiconductor journey, ensuring that the nation’s electronic ambitions are realized and maintained on the global stage.