CG Power and Industrial Solutions signed a fiscal support agreement with the India Semiconductor Mission as India strives to become a global semiconductor hub.
CG Power and Industrial Solutions, along with CG Semi Private Limited and the India Semiconductor Mission under the Ministry of Electronics and IT of India, have entered into a fiscal support agreement. As reported by IANS, KNN India, and Business Standard, the agreement secures a subsidy of up to INR35.01 billion (approx. US$404.09 million) for an OSAT facility in Sanand, Gujarat. This funding will cover 50% of the eligible capex necessary for the project, ensuring significant government backing for its development.
In 2024, CG Power and Industrial Solutions revealed plans for a joint venture with Japan's Renesas Electronics and Thailand's Stars Microelectronics to establish an OSAT facility in India. This endeavor will see an investment of INR76 billion (approx. US$877.20 million) over the next five years, supported by subsidies, equity, and possible bank loans.
The Sanand facility will produce up to 15 million units daily, catering to a diverse array of sectors, including automotive, consumer, industrial, and 5G, by offering a comprehensive range of products from legacy to advanced packages. The project is enhanced by receiving 50% fiscal support for eligible capexs.
S. Krishnan, Secretary of MeitY, praised CG Power for their in-depth understanding of the sector and rapid progress while stressing the importance of domestic intellectual property and market growth. He expressed confidence in CG Power's key role in the electronics value chain and its contribution to India's US$500 billion electronics production target by 2030. He affirmed the Indian government's continued support for the CG OSAT project.
Vellayan Subbiah, chairman of CG Power, stated that the agreement is a significant milestone for India's semiconductor industry, advancing the country's self-reliance in manufacturing and design. He pointed out that although Indians make up almost 20% of the global semiconductor design workforce, it is crucial for India to develop local brands and intellectual property while simultaneously boosting demand and establishing a strong supply chain.