PM Modi Inaugurates CG Semi's Sanand Plant, India's First Big Chip-Packaging Line to Go Commercial

From pilot line to commercial output

On 4 July 2026, Prime Minister Narendra Modi inaugurated commercial production at CG Semi's G1 Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat. The event marked the moment a pilot line that had been running trial batches formally switched on for the market, making Sanand one of the first Indian sites to package and test chips at commercial scale.

CG Semi is a joint venture led by CG Power and Industrial Solutions, part of the Murugappa Group, with Japan's Renesas Electronics and Thailand's Stars Microelectronics as technology and market partners. The facility has been built at an investment of about Rs 7,600 crore and was cleared under the India Semiconductor Mission (ISM).

What the plant actually does

OSAT is the back end of chip-making: the stage where finished silicon is assembled into packages, tested and readied for sale. It is less glamorous than a wafer fab but no less essential — without domestic packaging, chips fabricated anywhere still have to travel abroad to be finished.

CG Semi's G1 line is designed to produce a broad mix of package types, from legacy formats such as QFN (quad-flat no-lead) and QFP (quad-flat package) to more advanced flip-chip formats like FC-BGA (flip-chip ball-grid array) and FC-CSP (flip-chip chip-scale package). Those are the packages that go into automotive electronics, consumer and industrial devices, 5G equipment and power-electronics systems.

The pilot plant is already operational at a capacity of roughly half a million units a day, and the company has said it is targeting a peak annual capacity of about 4.7 billion units as it ramps over the next five years. CG Semi expects the project to generate around 5,000 direct and indirect jobs over the same period.

Sanand's turn as a chip cluster

Once known mainly as an automobile hub, Sanand is fast becoming India's first chip-packaging cluster. It already hosts Micron's assembly and test plant and Kaynes Semicon's OSAT unit, and CG Semi's commissioning adds a third anchor tenant. The wider ISM portfolio now spans a dozen approved fabrication and packaging projects, including Tata Electronics' front-end wafer fab at Dholera with Taiwan's PSMC.

Packaging-first is a deliberate sequencing choice. Assembly and test plants are cheaper and faster to build than leading-edge fabs, they create skilled jobs quickly, and they let Indian firms plug into the global supply chain while the far more capital-intensive fabs come up in parallel.

Why it matters

For India, the significance is less about any single package type and more about closing a structural gap. A chip designed in India and, increasingly, fabricated in India can now also be assembled and tested in India — shortening a supply chain that until recently ran entirely offshore. That end-to-end capability is exactly what the India Semiconductor Mission set out to build, and the CG Semi line is one of the first places where the plan shows up as boxes of finished, saleable chips rather than policy targets.

The road ahead is still long: yields, customer qualification and the economics of competing with entrenched Southeast Asian packaging giants will decide whether Sanand's clusters become globally competitive. But the switch from pilot to commercial production is a real milestone, and it happened on schedule.

Sources

• PM Modi to launch commercial production of semiconductor chips at OSAT Plant in Gujarat's Sanand on July 4 — ANI
• CG Semi starts commercial production at G1 OSAT facility in Sanand — Business Standard
• PM Modi to Launch CG Semi's Chip Plant in Gujarat's Sanand on July 4 — Republic World