TL;DR
Modi has inaugurated commercial production at CG Semi’s $870m OSAT plant in Sanand, Gujarat, which will initially package 200 million chips a year and scale to 500 million. It is the third packaging plant to come online under the India Semiconductor Mission, after Micron and Kaynes Semicon.
Prime Minister Narendra Modi has inaugurated commercial production at CG Semi’s chip assembly and testing plant in Sanand, Gujarat. The facility will initially turn out 200 million chips a year, according to ANI, with plans to scale to 500 million.
The plant is an outsourced semiconductor assembly and test, or OSAT, facility. That covers the packaging and testing end of the chip supply chain rather than fabricating silicon from scratch.
CG Semi is a joint venture between Mumbai-listed CG Power and Industrial Solutions, Japan’s Renesas Electronics, and Thailand’s Stars Microelectronics. CG Power holds 92.3% of the venture, which is investing INR 7,600 crore (around $870m) over five years.
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New Delhi is covering as much as half the eligible capital expenditure through a subsidy worth up to $404m under the India Semiconductor Mission. The same programme recently pulled in Intel and 3DGS for a $3.3bn glass-substrate plant in Odisha.
Chips packaged at Sanand will go into cars, scooters, and industrial equipment, with a significant share exported to Japan, the US, and Europe. The plant is expected to create around 5,000 direct and indirect jobs over the next five years, according to local reports.
Third plant off the line
CG Semi is not India’s first packaging plant to fire up. Micron’s Sanand facility began operations in February and Kaynes Semicon followed in March.
Six semiconductor projects worth a combined $14.7bn have now been approved in Gujarat, including ventures from Tata Electronics and Suchi Semicon. Sanand is emerging as the country’s first chip packaging cluster.
At full ramp, CG Semi has said the site could handle 15 million units a day, a peak annual capacity of roughly 4.7 billion chips. It will produce legacy packages such as QFN and QFP alongside advanced FC BGA and FC CSP formats for automotive, consumer, industrial, and 5G customers.
Packaging first, fabs later
The launch fits a broader charm offensive. Modi has courted tens of billions in AI infrastructure commitments from Amazon, Google, and Reliance, and India has joined the US-led Pax Silica alliance on chip supply chains.
Governments everywhere are subsidising local chip capacity, from the EU’s flagship fab in Dresden to Washington’s CHIPS Act, in an escalating global race for tech supremacy. India’s bet is on mastering packaging first and fabrication later.
Speaking at the inauguration, Modi called semiconductor growth the next phase of “Make in India” and pledged to build out the entire electronics value chain. Whether Sanand’s packaging lines can anchor that ambition is the question the next few years will answer.
