India's CG Semi Begins Commercial Chip Production at $870M Gujarat Plant, Third OSAT to Launch Under National Mission

Prime Minister Narendra Modi inaugurated commercial production at CG Semi's chip assembly and testing plant in Sanand, Gujarat, on July 4, 2026. The facility, an outsourced semiconductor assembly and test (OSAT) plant, will initially package 200 million chips annually, with plans to scale to 500 million.

The plant represents a $870 million investment over five years from CG Semi, a joint venture where CG Power and Industrial Solutions holds 92.3%, with Japan's Renesas Electronics and Thailand's Stars Microelectronics as partners. India's government is covering up to half of eligible capital expenditure through a subsidy worth up to $404 million under the India Semiconductor Mission.

Third OSAT Plant in India's Chip Packaging Cluster

CG Semi is the third packaging plant to launch under India's semiconductor push, following Micron's Sanand facility in February 2026 and Kaynes Semicon in March. Sanand is emerging as the country's first chip packaging cluster, with six semiconductor projects worth a combined $14.7 billion approved in Gujarat, including ventures from Tata Electronics and Suchi Semicon.

• At full ramp, CG Semi's site could handle 15 million units per day, reaching a peak annual capacity of roughly 4.7 billion chips.
• The plant will produce legacy packages such as QFN and QFP alongside advanced FC BGA and FC CSP formats for automotive, consumer, industrial, and 5G customers.
• Chips packaged at Sanand will go into cars, scooters, and industrial equipment, with a significant share exported to Japan, the US, and Europe.
• The facility is expected to create around 5,000 direct and indirect jobs over the next five years.

Broader Semiconductor Landscape: Hong Kong's Role and Storage Developments

India's push comes as global chip trade patterns shift. Hong Kong now handles more than half of China's $239 billion in semiconductor imports in the first five months of 2026, according to Bloomberg data, underscoring the city's role as a trade hub amid US export controls. Meanwhile, Chinese storage maker YMTC has gained a foothold in US retail laptops, with Lenovo using YMTC SSDs in some models despite the company being on the US Entity List. At Computex 2026, Silicon Motion showcased its SM8008 and SM8388 enterprise SSD controllers, targeting data center storage performance.

India's strategy focuses on mastering packaging before moving to fabrication. Modi called semiconductor growth the next phase of "Make in India" and pledged to build out the entire electronics value chain. Whether Sanand's packaging lines can anchor that ambition is the question the next few years will answer.