CG Semi's G1 semiconductor OSAT facility in Sanand, Gujarat, inaugurated as commercial chip production begins.
GUJARAT: Prime Minister Narendra Modi on Saturday inaugurated the commencement of commercial operations at the CG Semi G1 Outsourced Semiconductor Assembly and Test (OSAT) facility at Sanand, Gujarat, formally launching commercial semiconductor production at one of India’s first full-scale end-to-end OSAT facilities. The facility is India’s third semiconductor manufacturing facility to become operational under the India Semiconductor Mission (ISM), marking another milestone in the country’s efforts to strengthen domestic chip manufacturing and reduce reliance on imports.
The facility has been developed by CG Semi Private Limited, a joint venture between CG Power and Industrial Solutions Ltd. of the Murugappa Group, Renesas Electronics Corporation of Japan, and Stars Microelectronics of Thailand. The project represents an investment of more than ₹7,600 crore over five years and includes two advanced OSAT facilities, G1 and G2, in Sanand.
What is an OSAT facility?
OSAT stands for Outsourced Semiconductor Assembly and Test. Unlike semiconductor fabrication plants, which manufacture silicon wafers, an OSAT facility performs the critical final stages of semiconductor production. These include:
– Chip assembly
– Packaging
– Electrical testing
– Quality validation
– Reliability analysis
– Final shipment to customers
These processes ensure semiconductor chips are ready for use in electronic products ranging from smartphones and automobiles to industrial machinery, telecommunications equipment and defence systems.
Commercial production officially begins
The inauguration marks the transition of the Sanand facility from pilot operations to full commercial production. Before the launch, the company completed equipment installation, workforce training, process qualification and customer validation.
CG Semi has already begun commercial shipments of packaged semiconductor chips. Initial exports are being made to Malaysia for customers of Renesas Electronics, while exports to Japan, the United States and Europe are expected as production scales up, strengthening India’s role in the global semiconductor supply chain.
Production capacity and future expansion
The G1 facility has a production capacity of approximately 0.5 million semiconductor units per day.
The second unit, G2, is under construction around three kilometres from the G1 facility and is expected to be completed by the end of 2026. Once operational, G2 is expected to have a production capacity of approximately 14.5 million units per day, significantly expanding India’s semiconductor packaging capabilities.
Together, the two facilities are expected to generate more than 5,000 direct and indirect jobs over the coming years.
Advanced packaging technologies
The Sanand facility supports both legacy and advanced semiconductor packaging technologies, including SOIC, QFN, QFP, BGA, FCQFN and FCBGA packages. It is equipped with high-yield manufacturing systems, a Manufacturing Execution System (MES) for production automation and traceability, and in-house reliability and failure analysis laboratories to meet global quality standards.
The company has also trained Indian engineers, operators and technicians in Malaysia before the start of commercial production, helping build a skilled domestic semiconductor workforce.
Chips for multiple industries
The Sanand facility will package and test semiconductor chips used across several strategic industries, including:
– Automotive
– Consumer electronics
– Industrial equipment
– Telecommunications
– 5G infrastructure
– Internet of Things (IoT)
– Power electronics
– Defence
– Data centres
The project is expected to strengthen India’s participation in global semiconductor supply chains while supporting domestic electronics manufacturing.
PM Modi highlights India’s semiconductor ambitions
During the inauguration, Prime Minister Modi said India’s semiconductor programme is progressing rapidly and that the country is steadily moving towards becoming a trusted global electronics manufacturing destination.
He said semiconductor manufacturing is one of the key pillars of India’s vision for technological self-reliance and economic growth, adding that investments in the sector will generate high-skilled employment and support innovation across industries.
Why Sanand is becoming India’s semiconductor hub
Sanand has rapidly emerged as India’s leading semiconductor manufacturing cluster.
The city already hosts:
– Micron Technology’s Assembly, Testing, Marking and Packaging (ATMP) facility
– Kaynes Semicon’s OSAT facility
– CG Semi’s OSAT facility
With multiple semiconductor projects concentrated in one location, Sanand is evolving into one of India’s most important semiconductor manufacturing centres.
Part of the India Semiconductor Mission
The CG Semi project is among the semiconductor projects approved under the India Semiconductor Mission, the Government of India’s flagship initiative to build a complete semiconductor value chain in the country.
The commencement of commercial operations at the Sanand facility marks another significant step in translating policy into manufacturing capability and strengthening India’s semiconductor ecosystem.
Why this matters
Semiconductors are the foundation of modern electronics and are used in smartphones, laptops, electric vehicles, defence equipment, medical devices, telecommunications infrastructure and artificial intelligence systems.
India currently imports a large share of its semiconductor requirements. Expanding domestic manufacturing is expected to reduce dependence on imports, strengthen supply chain resilience, attract global investment, generate high-skilled employment and support the country’s growing electronics manufacturing sector.
The start of commercial operations at the CG Semi facility represents an important milestone in India’s semiconductor journey. It reflects the country’s transition from approving semiconductor projects to manufacturing and exporting packaged chips, strengthening its position in the global semiconductor supply chain.
About the Author
