India’s First OSAT Facility : A Milestone in Semiconductor Push

In a landmark step for India’s chip ecosystem, CG Semi Private Limited—a subsidiary of CG Power—has inaugurated the nation’s first Outsourced Semiconductor Assembly and Test (OSAT) facility in Gujarat’s Sanand. With a committed investment of ₹7,600 crore over five years, the project strengthens India’s ambitions to achieve semiconductor self-reliance and secure a place in the global chip supply chain.

Two-Phase Expansion Plan : From Pilot to Global Scale

The project is structured in two phases :

• G1 Pilot Plant (2025) : Recently inaugurated, with a peak capacity of 0.5 million chips/day, aimed at qualifying products for automotive, consumer electronics, and microcontrollers. Commercial production is expected to start in 2026.

• G2 Large-Scale Plant (2026) : Currently under construction, designed to produce 14.5 million chips/day by late 2026, positioning India as a serious player in global semiconductor packaging and testing.

Employment & Economic Impact

The OSAT facility is expected to generate over 5,000 jobs both direct and indirect—covering engineers, technicians, and allied services. Gujarat, which already hosts semiconductor projects by Micron, Tata Electronics, and Kaynes, is fast emerging as India’s chip manufacturing hub.

Government Backing : India Semiconductor Mission

The initiative is supported under the India Semiconductor Mission (ISM), which provides 50% capital subsidy on eligible capex. This fiscal support reduces investment risks and accelerates execution. It also aligns with the government’s broader ₹76,000 crore semiconductor incentive program, aimed at reducing chip imports and building sovereign capacity in electronics manufacturing.

Strategic Significance

Industry leaders describe semiconductors as the “new steel” for India’s technological and economic future. The first Made-in-India chip from the G1 plant is expected soon, marking a tangible shift from policy vision to execution.

However, challenges persist. Global supply chain vulnerabilities such as strains faced by US wafer supplier Wolfspeed highlight the risks India must navigate as it builds its semiconductor ecosystem.

Final Word

The launch of CG Semi’s OSAT facility is more than just a corporate milestone it is a national breakthrough. By moving from planning to production, India has taken a decisive step in its semiconductor journey. While the real scale of benefits will emerge after 2026, this development cements India’s position on the global semiconductor map, making the sector one of the most closely watched in the coming years.

Sources

Business Today, LiveMint,

PIB,

BusinessWire,

Economic Times,

Times of India,

The Tribune,

Financial Express