India took another major step towards building its domestic semiconductor industry as CG Semi started commercial production at its semiconductor packaging and testing facility in Sanand, Gujarat. The company has already produced more than 200 million semiconductor chips, making it one of the first large-scale commercial semiconductor manufacturing operations in the country. The facility was inaugurated by Prime Minister Narendra Modi and is the country’s third semiconductor manufacturing plant.
The Sanand plant has been developed by CG Semi, a subsidiary of CG Power and Industrial Solutions, in partnership with Renesas Electronics of Japan and STARS Microelectronics of Thailand. The project has been built with an investment of around ₹7,600 crore under the Government of India’s Semicon India Programme. While Renesas brings semiconductor design and technology expertise, STARS contributes its experience in chip assembly and packaging, making the project a strategic collaboration between Indian and international companies. At the equity level, CG Power holds over 92% of the venture, while Renesas and STARS hold smaller stakes.
The facility is an Outsourced Semiconductor Assembly and Test (OSAT) plant. Notably, unlike a semiconductor fabrication plant, which manufactures silicon wafers, an OSAT facility packages finished silicon dies into usable chips, performs electrical and reliability testing, and prepares them for commercial use. These processes are critical because they ensure that chips can withstand heat, vibration and long operating hours before they are supplied to manufacturers.
The Sanand plant has an initial production capacity of around 15 million chips per day and aims to scale up to about 4.7 billion chips annually over the next five years. It is capable of producing several advanced semiconductor packages, including QFN, QFP, SOIC, SOP, TSSOP, Flip-Chip BGA, Flip-Chip CSP and Flip-Chip QFN, which are widely used in high-performance electronics.
The chips produced at the facility will serve a wide range of industries, including automotive, consumer electronics, industrial equipment, telecommunications, electric vehicles, power electronics, networking and Internet of Things (IoT) devices. With domestic packaging and testing now available, Indian electronics manufacturers are expected to benefit from shorter supply chains and reduced dependence on imports.
The project is also expected to create around 5,000 direct and indirect jobs while encouraging more investments in semiconductor materials, speciality chemicals, manufacturing equipment and precision engineering. Even before its formal inauguration, the company had started exporting packaged semiconductor chips.
The Sanand plant joins other major semiconductor projects being developed in India, including Micron Technology’s assembly and test facility, Tata Electronics’ semiconductor fabrication plant at Dholera, Tata Semiconductor Assembly and Test in Assam and Kaynes Technology’s packaging facility, together helping build a complete semiconductor ecosystem in the country.
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Ashutosh is a Senior Writer at The Tech Portal, largely reporting on new tech, and intersection of technology and business. Ashutosh’s career spans across nearly a decade of technology writing across multiple platforms and languages.
