India just started packaging chips for money, not just for demonstrations, and the plant doing it sits in a Gujarat town better known for making cars.
Prime Minister Narendra Modi inaugurated CG Semi's outsourced semiconductor assembly and test facility in Sanand on July 4, and with it came something India hadn't managed before: commercial-scale chip packaging running at volume. The plant is a joint venture between CG Power and Industrial Solutions, which holds 92.3% of the equity, Japan's Renesas Electronics at 6.8%, and Thailand's Stars Microelectronics at 0.9%. Renesas brought advanced packaging technology to the table. Stars Microelectronics brought training and expertise in legacy packages. CG put up most of the money and the land.
That money is considerable. The joint venture is investing roughly Rs 7,600 crore, north of $900 million, over five years, according to the companies' own statement when the deal was signed. India's government is covering about half of that through a subsidy of up to Rs 35.01 billion under the India Semiconductor Mission, approved by the Union Cabinet back on February 29, 2024. Construction, in other words, took a little over two years from cabinet approval to a prime ministerial ribbon-cutting.
The Sanand plant will assemble and test everything from legacy QFN and QFP packages to the more advanced FC-BGA and FC-CSP formats used in higher-end automotive, industrial, 5G and power electronics. Output is set to scale toward 15 million units a day at full capacity, and the project is expected to generate around 5,000 jobs. None of these chips will be designed or fabricated here. OSAT stands for outsourced semiconductor assembly and test, the back end of the chip business, where finished silicon gets cut, packaged, wired and tested before it ships to a customer. It's the part of the industry you can stand up in two years. A fab takes far longer and costs far more.
CG Semi isn't actually the first chip packaging operation in Sanand. Micron's $2.75 billion assembly, test, marking and packaging facility there was inaugurated on February 28, 2026, and Kaynes Semicon's OSAT unit reached commercial production the following month, shipping its first 900 multi-chip modules to Alpha & Omega Semiconductor back in October 2025 and working toward 6.3 million chips a day. What CG Semi adds is scale and a foreign technology partner in Renesas, plus a product mix that reaches into higher-value advanced packaging rather than staying entirely in legacy formats. Three plants in one town, all built inside roughly three years, is what a cluster actually looks like, not a press release describing one.
The bigger bet sits in Assam. Tata Electronics is building an OSAT and assembly, test, mark and pack complex in Jagiroad, in Morigaon district, backed by roughly Rs 27,000 crore and designed to eventually output 48 million chips a day, more than three times what CG Semi is targeting. Tata's separate wafer fabrication plant in Dholera, Gujarat, the part of the supply chain India hasn't cracked yet, is aiming for first silicon by December 2026, a date Union Minister Ashwini Vaishnaw has repeated publicly. Packaging is the easier half of this bet. Fabrication is the one that actually determines whether India builds chips or just finishes them.
Here's the part that keeps this in perspective. Taiwan's ASE Technology alone held 44.6% of the global OSAT market in 2024, according to TrendForce. China isn't far behind and closing fast: JCET grew sales 19.3% that year, Huatian Technology, now rebranded HT-Tech, grew 26%, and five Chinese firms cracked the global top ten OSAT ranking in 2025. India has zero companies in that top tier right now. CG Semi's 15-million-unit daily target, once it gets there, would still be a rounding error against ASE's global footprint. That doesn't make Sanand's ribbon-cutting meaningless. It means India has finally entered a race it wasn't running in at all three years ago, at the back of a very long pack.
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