India's semiconductor manufacturing ecosystem took a major leap on Saturday as Prime Minister Narendra Modi inaugurated the CG Semi Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat.
Developed under the India Semiconductor Mission with an investment of over Rs 7,500 crore, the plant is expected to strengthen India's position in the global semiconductor supply chain.
What is an OSAT facility?
An Outsourced Semiconductor Assembly and Test (OSAT) facility is responsible for the final stages of semiconductor manufacturing. While semiconductor wafers are fabricated at separate fabrication plants (fabs), OSAT facilities assemble individual chips into protective packages and test them to ensure they meet quality and performance standards before they are shipped to customers.
These facilities play a crucial role in the semiconductor value chain, enabling chips to be integrated into products such as smartphones, automobiles, industrial equipment, consumer electronics and telecommunications devices.
About the Sanand semiconductor plant
The CG Semi facility is expected to manufacture semiconductor chips primarily for the automotive, industrial and memory sectors. According to Union Electronics and Information Technology Minister Ashwini Vaishnaw, chips produced at the plant will be used in cars, scooters and various industrial applications. A significant portion of the production will also be exported to markets including Japan, the United States and Europe, making it one of India's first semiconductor manufacturing units with a strong export focus.
Once fully operational, the facility is expected to have the capacity to produce up to 5 billion semiconductor chips annually, helping meet the growing global demand for memory and storage solutions.
Why is this facility important for India?
Semiconductors are the foundation of modern electronics and are used in everything from smartphones and laptops to electric vehicles, medical equipment, defence systems and artificial intelligence hardware. Until recently, India relied almost entirely on imports for semiconductor requirements.
The Sanand OSAT facility represents a significant step towards reducing that dependence by developing domestic chip manufacturing capabilities. It is expected to boost high-tech manufacturing, create skilled jobs, attract further investments into the semiconductor sector and integrate India more deeply into global electronics supply chains.
The project is also a key component of the India Semiconductor Mission, under which the government is investing heavily to establish semiconductor fabrication, assembly, testing and packaging capabilities in the country. By building a complete semiconductor ecosystem, India aims to emerge as a trusted global manufacturing hub at a time when countries are seeking to diversify supply chains beyond traditional production centres.
PM Modi sets 500 million chips per year target
During the inauguration, Prime Minister Modi toured the facility, inspected the production process and interacted with engineers and operators working at the plant.
Addressing the gathering, the Prime Minister said he had been informed that the facility would initially produce 200 million chips annually, with plans to scale up production to 500 million chips a year, equivalent to more than 15 million chips every day. He said the ambitious target reflected the rapid progress of the Semicon India programme and expressed confidence that the company would achieve it soon.
Modi also recalled that he had envisioned establishing a semiconductor manufacturing ecosystem in Gujarat more than two decades ago, describing the inauguration as a significant step towards realising that vision.
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