Full Breakdown
India’s Sanand OSAT Facility Begins Commercial Chip Production
7/5/2026, 8:13:21 AM
Inauguration of the Sanand OSAT Facility
On 4 July 2026 Prime Minister Narendra Modi inaugurated the CG Semi Outsourced Semiconductor Assembly and Test (OSAT) plant in Sanand, Gujarat. The ceremony, attended by Union Minister Ashwini Vaishnaw, Gujarat Chief Minister Bhupendra Patel and senior industry leaders, marked the start of commercial chip packaging at India’s third major semiconductor unit.
Background: India’s Semiconductor Mission
The facility is part of the India Semiconductor Mission (ISM), launched in 2021 with a INR76,000 crore outlay to create a domestic chip ecosystem. The government’s “Design-in-India, Make-in-India” strategy has progressed from mobile-phone assembly to component manufacturing and now to semiconductor packaging, aiming to reduce reliance on imports and position India as a global hub.
Partnerships and Stakeholders
CG Power and Industrial Solutions (Murugappa Group) holds a 92.3 % stake in the joint venture. International technical partners include Renesas Electronics Corporation (Japan) and Stars Microelectronics (Thailand). The collaboration is described as a “technology-trust-partnership” intended to accelerate India’s semiconductor journey.
Capacity and Investment Figures
- Investment: INR7,500–7,600 crore (? $870 million).
- Initial output: 20 crore (200 million) chips per year, equivalent to 1.5 crore (15 million) units per day.
- Long-term target: 500 crore (5 billion) chips annually, contingent on the second G2 plant under construction.
- Production scope: Packaging and testing of wafers supplied by external foundries; the plant does not perform front-end fabrication.
Workforce and Regional Impact
The plant’s staff includes young engineers from across India and women from tribal communities in Jharkhand, Chhattisgarh, Madhya Pradesh and other states, many of whom received advanced training in Malaysia. Modi referred to the site as a “Mini India,” highlighting its diverse workforce and the potential for hundreds of ancillary industries to emerge around the cluster.
Official Government Statements
Prime Minister Modi emphasized that the inauguration demonstrates India’s ability to translate policy into tangible outcomes, noting the rapid progression from foundation stone (2024) to chip testing (August 2025) and commercial production. He linked the facility to the broader “electronics revolution” that has made India the world’s second-largest mobile-phone manufacturer and exporter. Union Minister Vaishnaw highlighted the plant’s role in supplying chips for automotive, industrial and consumer applications and stressed its contribution to export markets in Japan, the United States and Europe. Gujarat Science and Technology Minister Arjun Modhwadia described the project as a catalyst for Gujarat’s leadership in the semiconductor sector, noting that six of the country’s approved semiconductor projects are located in the state.
Verbatim Quotes
- “Today’s event is proof that whatever India resolves to do, it firmly accomplishes,” — Narendra Modi, Prime Minister of India
- “This integrated partnership is going to give entirely new momentum to India’s semiconductor journey,” — Narendra Modi, Prime Minister of India
- “Vellayan Subbiah, Chairman of CG Power, said, “Today, this first shipment speaks louder than any words.” — Vellayan Subbiah, Chairman, CG Power
- “These daughters with truly extraordinary dreams are today an integral part of the Made in India chip manufacturing process,” — Narendra Modi, Prime Minister of India
- “The chips manufactured at this plant will be used in cars, scooters and various industrial applications.” — Ashwini Vaishnaw, Union Minister for Electronics & IT
Conflicting Reports & Gaps
Sources differ on the plant’s ultimate capacity: some cite a target of 500 crore chips annually (? 5 billion), while others state the fully-scaled facility will reach 5 billion units per year. Additionally, the timeline for the G2 expansion is mentioned as “by the end of 2026” in some reports and “before the end of 2026” in others, leaving a narrow but unconfirmed window.
Future Outlook
The G2 expansion aims to raise annual capacity to the 500 crore target, while the broader ISM envisions ten additional plants across six states by 2035. Continued investment, workforce development and qualification of output by global OEMs will determine whether the Sanand OSAT facility can sustain its projected role in the international semiconductor supply chain.
