PM Modi lays foundation for ASIP's chip plant, Andhra Pradesh's first ISM-approved semiconductor unit

South India gets its first ISM-approved chip unit

On 1 August 2026, Prime Minister Narendra Modi laid the foundation stone for a semiconductor Outsourced Assembly and Test (OSAT) plant at Tarluvada, on the outskirts of Visakhapatnam, that the government describes as Andhra Pradesh's — and South India's — first chip-manufacturing facility cleared under the India Semiconductor Mission (ISM). The unit, being built by ASIP Technologies Pvt Ltd in partnership with South Korea's APACT Co., was one of a clutch of projects worth more than ₹17,900 crore that the Prime Minister inaugurated or initiated during a day-long visit to the state.

For a region long anchored in India's software and services economy, the ceremony signalled a shift toward the harder, more capital-intensive end of the electronics value chain — the packaging, assembly and testing that turn bare silicon dies into finished, usable chips.

What ASIP is building

According to the Prime Minister's Office, ASIP is developing the 30-acre facility with an initial investment of more than ₹460 crore; some industry reports peg the company's full, multi-phase outlay closer to ₹2,500 crore as the plant scales. At capacity, the unit is designed to package roughly 96 million chips a year and is expected to generate about 2,600 direct and indirect jobs.

The plant will target high-growth end-markets — artificial intelligence, high-performance computing, data centres and high-speed communications — where demand for advanced packaging has surged as chipmakers squeeze more performance out of each die. APACT, the Korean technology partner, brings assembly-and-test know-how that ASIP intends to localise in Andhra Pradesh.

Where OSAT sits in the chip chain

OSAT is the back end of semiconductor manufacturing. After wafers are fabricated, individual dies must be cut, mounted, wire-bonded or bumped, encapsulated and tested before they can be shipped. It is less glamorous than a leading-edge fab, but it is indispensable — and it is where India, lacking a high-volume commercial fab, has chosen to build its first foothold. Packaging is comparatively less capital-intensive than fabrication, employs large skilled workforces, and lets Indian firms plug into global supply chains quickly.

How it fits into the mission

ASIP was one of four projects the Union Cabinet cleared in August 2025 under the first phase of the India Semiconductor Mission, a batch carrying a combined outlay of about ₹4,594 crore and spanning Punjab, Andhra Pradesh and Odisha. The others included Continental Device India Ltd in Mohali, SiCSem and 3D Glass Solutions in Odisha. With those approvals, the number of projects sanctioned under the ISM crossed into double digits, representing cumulative investment commitments of roughly ₹1.6 lakh crore across several states.

The Visakhapatnam unit also lands as the government pivots from ISM 1.0 to a far larger "Semicon 2.0" programme, approved earlier in 2026 with an outlay in excess of ₹1.2 lakh crore that widens support to chip design, equipment, specialty materials and advanced packaging.

Why Andhra, why now

Andhra Pradesh has been courting electronics investment aggressively, and the ASIP plant gives the state its first tangible semiconductor anchor. Officials have framed the facility as the seed of an ancillary ecosystem — substrates, chemicals, precision tooling and testing services — that typically grows around a packaging hub. Local experts quoted around the event argued that a single OSAT line rarely stands alone; it tends to pull in suppliers and skilled talent, which is the deeper prize for a state trying to build an electronics cluster from a low base.

The road ahead

A foundation stone is a beginning, not a ribbon-cutting. India's chip push has repeatedly shown the gap between announcement and commercial output, with several flagship projects seeing revised timelines and phased ramps. ASIP will need to install and qualify assembly lines, secure customers and prove yield before its 96-million-chip target becomes real volume. Still, for a mission that has been criticised as fab-heavy and slow, a South Indian OSAT breaking ground broadens the map — geographically and technologically — of where India intends to make chips.

Sources

• Prime Minister's Office — PM to visit Andhra Pradesh and Karnataka on 1 August: https://www.pmindia.gov.in/en/news_updates/pm-to-visit-andhra-pradesh-and-karnataka-on-1-august/
• Business Standard — PM Modi lays foundation stone for ASIP chip facility in Vizag: https://www.business-standard.com/india-news/pm-modi-lays-foundation-stone-asip-semiconductor-plant-visakhapatnam-126080100662_1.html
• The Hans India — Modi lays stone for South's 1st ISM-approved chip unit in AP: https://www.thehansindia.com/news/cities/visakhapatnam/modi-lays-stone-for-souths-1st-ism-approved-chip-unit-in-ap-1104105
• IndianWeb2 — PM Modi lays foundation for South India's first semiconductor OSAT facility: https://www.indianweb2.com/2026/08/pm-modi-lays-foundation-for-south.html
• PIB — Cabinet approves semiconductor units in Odisha, Punjab and Andhra Pradesh: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2155456