New Delhi: In a landmark move to bolster India’s semiconductor manufacturing ecosystem, a Fiscal Support Agreement (FSA) was signed today between the India Semiconductor Mission (ISM), CG Power and Industrial Solutions Ltd., and CG Semi Pvt. Ltd. This agreement marks a significant milestone in India’s efforts to establish itself as a key player in the global semiconductor value chain.
Under the agreement, CG Power is set to establish an Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat, with an investment of approximately ₹7,600 crore. The project is being developed in partnership with Renesas Electronics America Inc. and Stars Microelectronics (Thailand) Public Co. Ltd., and will receive 50% fiscal support on a pari-passu basis for eligible CAPEX from the ISM.
The OSAT facility is part of the Modified Programme for Development of Semiconductor and Display Manufacturing Ecosystem, an initiative aimed at fostering domestic innovation and capacity in this critical sector. The Secretary of ISM reiterated the government’s commitment to supporting the project at every stage, praising CG Power’s proactive approach and sectoral expertise.
“This facility is a step forward in India’s goal to achieve $500 billion in electronics production by 2030. It underscores the importance of domestic intellectual property and market development in building a self-reliant India,” the Secretary stated.
Vellayan Subbiah, Chairman of CG Power and Industrial Solutions Ltd., hailed the signing of the FSA as a turning point for India’s semiconductor industry. He highlighted the critical need for India to develop homegrown brands and intellectual property, noting that while Indian talent contributes 20% of the global semiconductor design workforce, domestic manufacturing capabilities remain underdeveloped.
“By aligning demand with supply chain development, this project will not only meet India’s semiconductor needs but also contribute to global resilience in the semiconductor value chain,” Subbiah added.
Sushil Pal, CEO of India Semiconductor Mission, commended CG Power’s swift progress in finalizing the agreement, emphasizing the project’s potential to drive technological advancements and economic growth while fostering high-tech employment opportunities.
The OSAT facility will play a pivotal role in advancing India’s semiconductor capabilities, offering cutting-edge assembly and testing solutions critical to modern electronics. This initiative is expected to strengthen India’s position as a trusted global partner, ensuring an efficient, resilient, and sustainable semiconductor supply chain.
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