CG Semiconductor OSAT Facility in Sanand: Powering India’s Semiconductor Revolution

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India’s ambition to become a global semiconductor powerhouse has taken a significant step forward with the commissioning of the CG Semiconductor OSAT (Outsourced Semiconductor Assembly and Test) Facility in Sanand, Gujarat. Developed with an investment of nearly ₹7,600 crore, the plant represents far more than another manufacturing unit—it is an important building block in creating India’s complete semiconductor ecosystem.

While semiconductor fabrication plants often receive the most attention, experts believe that advanced assembly, packaging and testing facilities are equally essential. Every semiconductor chip manufactured anywhere in the world must eventually undergo packaging and testing before it can be used in smartphones, automobiles, industrial machinery, medical devices or telecommunications equipment.

The CG Semiconductor facility positions India to participate in this crucial stage of the global semiconductor value chain.

Understanding What an OSAT Facility Does

A semiconductor chip is not ready for commercial use immediately after it is fabricated on a silicon wafer. The wafer contains hundreds or even thousands of tiny chips that must be separated, packaged, tested and certified before reaching customers.

This is where an OSAT facility becomes indispensable.

The CG Semiconductor plant performs several advanced functions:

• Die attachment and chip assembly
• Wire bonding and flip-chip packaging
• Encapsulation and protection
• Thermal management
• Electrical testing
• Quality assurance
• Reliability testing
• Final inspection and shipment

These processes determine how efficiently a chip performs, how much heat it generates, how long it lasts and whether it can withstand demanding operating conditions.

As semiconductor technology evolves, advanced packaging has become almost as important as chip design itself.

Why Sanand Was Chosen

Sanand has rapidly transformed into one of India’s premier manufacturing destinations. Initially known for automobile production, the region has gradually evolved into an electronics and semiconductor hub.

Several factors make Sanand an ideal location:

• Excellent road, rail and port connectivity
• Reliable electricity infrastructure
• Industrial water supply
• Large industrial land parcels
• Business-friendly state policies
• Availability of skilled engineering talent
• Strong ecosystem of suppliers and manufacturers

The concentration of multiple semiconductor projects in Gujarat also creates economies of scale. Companies benefit from shared suppliers, logistics providers, equipment vendors and trained manpower.

This clustering effect is one reason why countries such as Taiwan, South Korea and Singapore became semiconductor leaders.

Partnership with Global Technology Leaders

The project is being developed through CG Semi, a joint venture involving:

• CG Power and Industrial Solutions
• Renesas Electronics Corporation (Japan)
• Stars Microelectronics (Thailand)

Each partner contributes unique expertise.

Renesas is globally recognised for automotive and industrial semiconductors, while Stars Microelectronics brings decades of experience in semiconductor packaging and testing. CG Power contributes local manufacturing capability and execution experience.

This international collaboration allows India to access advanced packaging technologies while simultaneously building domestic expertise.

Supporting India’s Fast-Growing Electronics Industry

India has become one of the world’s largest consumers of electronics.

Demand continues to rise across sectors including:

• Smartphones
• Electric vehicles
• Consumer electronics
• Industrial automation
• Medical equipment
• Renewable energy systems
• Defence electronics
• Telecommunications
• Artificial Intelligence
• Internet of Things (IoT)

Each of these industries relies heavily on semiconductor chips.

Until recently, India depended almost entirely on overseas companies for chip packaging and testing. The new OSAT facility helps reduce this dependence while strengthening domestic supply chains.

Transforming India’s Automotive Industry

Modern vehicles are essentially computers on wheels.

Premium vehicles may contain more than 3,000 semiconductor chips controlling:

• Engine management
• Battery systems
• Airbags
• Anti-lock braking systems
• Cameras
• Radar sensors
• Infotainment
• Navigation
• Climate control
• Autonomous driving features

Electric vehicles require even more sophisticated semiconductor components.

Since Gujarat already hosts a strong automobile manufacturing ecosystem, the availability of nearby semiconductor packaging facilities offers significant advantages for vehicle manufacturers.

Boost for Telecom and 5G Expansion

India’s rapid rollout of 5G networks requires millions of semiconductor components.

Network infrastructure, base stations, routers, fibre equipment and mobile devices all depend upon advanced chips.

The CG Semiconductor facility will support companies involved in:

• 5G equipment manufacturing
• Network hardware
• Communication modules
• Wireless technologies
• IoT devices

As India prepares for future technologies such as 6G, domestic semiconductor capabilities will become even more valuable.

Massive Employment Potential

One of the biggest advantages of semiconductor manufacturing is its ability to generate high-quality employment.

Although highly automated, semiconductor plants require thousands of skilled professionals.

The Sanand facility is expected to create opportunities for:

• Semiconductor engineers
• Electronics engineers
• Mechanical engineers
• Chemical engineers
• Production specialists
• Clean-room technicians
• Equipment maintenance experts
• Automation professionals
• Quality assurance engineers
• Supply chain managers
• Research scientists
• Software engineers
• Logistics professionals

Indirect employment will be even larger.

Supporting industries such as chemicals, gases, precision engineering, packaging materials, industrial construction, transportation and equipment maintenance will also benefit.

Industry experts estimate that every direct semiconductor job can create several indirect jobs across the supply chain.

Developing a Skilled Workforce

Semiconductor manufacturing requires specialised skills rarely available in traditional manufacturing sectors.

The establishment of advanced OSAT facilities encourages universities, engineering colleges and technical institutes to introduce specialised semiconductor courses.

Students will gain opportunities in:

• Chip packaging
• Semiconductor reliability
• Materials science
• Clean-room operations
• Automation engineering
• Industrial robotics
• Precision manufacturing

This contributes to building India’s long-term technological capability.

Strengthening India’s Semiconductor Mission

The Government of India’s India Semiconductor Mission (ISM) aims to establish a complete semiconductor ecosystem rather than isolated factories.

The long-term vision includes:

• Chip design
• Wafer fabrication
• Assembly
• Packaging
• Testing
• Research
• Equipment manufacturing
• Supply chain development

The CG Semiconductor facility fills one of the most critical gaps in this value chain.

Combined with ongoing investments in fabrication plants and semiconductor design centres, India is gradually building an integrated semiconductor industry.

Economic Impact Beyond Manufacturing

The economic benefits extend well beyond the factory itself.

A successful semiconductor ecosystem attracts:

• Global electronics manufacturers
• Equipment suppliers
• Material producers
• Research centres
• Start-ups
• Design companies
• Venture capital investment

Cities hosting semiconductor industries often witness rapid growth in housing, education, healthcare, logistics and supporting services.

Sanand is expected to experience similar economic expansion as additional semiconductor investments arrive.

Challenges Ahead

Despite this progress, India’s semiconductor journey is only beginning.

The industry remains highly competitive and capital-intensive. Success will depend on continuous investment, reliable infrastructure, skilled manpower and technological innovation.

India must also strengthen domestic capabilities in semiconductor materials, specialty chemicals, manufacturing equipment and research to build a truly self-reliant ecosystem.

However, projects like the CG Semiconductor OSAT Facility provide a strong foundation for achieving these goals.

The Road Ahead

The CG Semiconductor OSAT Facility is more than a manufacturing plant—it is a strategic investment in India’s technological future. By adding world-class chip assembly and testing capabilities, the project strengthens the country’s position in global semiconductor supply chains while reducing dependence on imported services.

As demand for semiconductors continues to grow across electric vehicles, artificial intelligence, 5G, renewable energy and smart devices, facilities like this will become central to India’s industrial growth. Beyond creating thousands of direct and indirect jobs, the project is expected to stimulate innovation, attract further investments and encourage the development of a skilled semiconductor workforce.

If India continues to expand its semiconductor ecosystem with similar projects, the country could emerge as one of the world’s leading semiconductor manufacturing and packaging destinations over the coming decade, making the Sanand facility a cornerstone of that transformation.