Prime Minister Narendra Modi inaugurated the CG Semi Outsourced Semiconductor Assembly and Test facility in Sanand, Gujarat, on Friday.

The opening of the plant marks a significant step in India's Semiconductor Mission, aiming to reduce reliance on foreign chip imports and establish a domestic manufacturing ecosystem.

The project represents an investment of Rs 7,600 crore [1], or approximately $870 million [2]. The facility is designed to handle the assembly and testing of semiconductors, a critical stage in the electronics supply chain.

Initial production capacity at the Sanand plant is set at approximately 200 million chips per year [3]. According to government plans, the facility is intended to scale its output to 500 million chips annually [3].

Modi said the project fulfills a 20-year dream of establishing domestic chip manufacturing in India. The facility is part of a broader strategy to position the country as a global hub for electronics and semiconductor production.

The CG Semi plant focuses on the OSAT process, which involves packaging and testing chips after the initial fabrication of the silicon wafers. This specialized infrastructure allows India to enter the semiconductor value chain without the immediate need for full-scale fabrication plants, which require significantly higher capital investment.

By localizing these processes, the government intends to support the growth of the domestic electronics industry, and attract further foreign investment into the region.

“The project represents an investment of Rs 7,600 crore”

The inauguration of the CG Semi plant signals India's shift from being a consumer of semiconductors to a participant in the manufacturing process. By focusing on Outsourced Semiconductor Assembly and Test (OSAT) capabilities, India is targeting a specific, high-value niche of the supply chain that can provide immediate industrial growth while the country works toward the more complex goal of full silicon wafer fabrication.