India's Semiconductor Journey Gains Strong Momentum: PM Modi Inaugurates CG Semi Facility in Gujarat

Prime Minister Narendra Modi inaugurated the CG Semi Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand on July 4, 2026. This event represents a notable milestone in India's efforts to strengthen its domestic semiconductor capabilities and advance technological self-reliance.

The inauguration underscores the steady progress being made in building a comprehensive electronics ecosystem, from design and components to advanced chip manufacturing and packaging. It reflects India's growing ambition to emerge as a significant player in the global semiconductor value chain.

The government's goal is to build a complete semiconductor ecosystem in India, PM Modi said | NDTV

Vision for a Self-Reliant Semiconductor Ecosystem

In his address, Prime Minister Modi emphasized the systematic development of the entire electronics value chain in India. He noted that the country is moving forward with products, components, and now semiconductors, describing this as a clear roadmap toward Viksit Bharat or a developed India. He highlighted that such advancements build upon the electronics revolution witnessed over the past decade.

The Prime Minister pointed out that India's youth are well-positioned to lead innovations in artificial intelligence, robotics, and next-generation technologies through indigenous chip manufacturing. He described the expansion of the semiconductor sector as a natural progression rather than an overnight achievement, aligning with the broader goals of "Make in India" and fostering innovation-driven growth.

Details of the CG Semi OSAT Facility

The CG Semi facility, a joint venture involving CG Power and Industrial Solutions from the Murugappa Group, Japan's Renesas Electronics, and Thailand's Stars Microelectronics, has commenced commercial production. Developed with an investment exceeding ₹7,500 crore, it stands as one of the early end-to-end OSAT plants in the country. It provides integrated services covering chip assembly, packaging, testing, and post-test processes for both conventional and advanced technologies.

Currently, the G1 unit has an initial annual capacity to package around 200 million chips, with plans to scale up to 500 million chips per year. A second facility (G2) is under construction nearby and is expected to be completed by the end of 2026, significantly boosting overall output. Once fully operational, the combined facilities aim to produce up to 5 billion chips annually and generate more than 5,000 direct and indirect employment opportunities.

Chips manufactured here will cater to various sectors, including automotive and industrial applications, with exports directed toward key international markets such as Japan, the United States, and Europe. The project benefits from support under the India Semiconductor Mission and exemplifies successful collaboration between Indian industry and global technology partners.

Progress Under the India Semiconductor Mission

The CG Semi inauguration adds to the growing momentum of the Semicon India Programme. With three facilities now in commercial production, including earlier units by Micron and Kaynes Semicon, the initiative continues to attract substantial investments across multiple states. Gujarat, in particular, has positioned itself as a prominent hub for semiconductor projects.

The broader ecosystem development includes skill enhancement programs, with thousands of engineers being trained and numerous institutions introducing relevant courses. Plans for India Semiconductor Mission 2.0 aim to further expand capabilities in areas such as advanced manufacturing, materials, equipment, and research and development, building a more resilient and comprehensive supply chain.

Looking Ahead: Opportunities and Strategic Importance

This facility not only enhances India's technological capabilities but also contributes to economic growth through job creation, export potential, and reduced dependence on imports for critical components. It highlights the importance of long-term policy focus, infrastructure development, and industry partnerships in high-technology sectors.

The MGMM Outlook 

India's semiconductor sector is steadily transitioning from policy ambition to industrial execution, and the commissioning of the CG Semi OSAT facility reflects the importance of building domestic capabilities in a technology that underpins nearly every modern industry. Expanding chip assembly, packaging, and testing within India strengthens the country's manufacturing ecosystem while reducing dependence on external supply chains. Combined with government initiatives, international collaborations, and increasing private investment, such projects lay the foundation for a resilient semiconductor ecosystem capable of supporting emerging technologies like artificial intelligence, robotics, electric vehicles, and advanced electronics.

The continued expansion of semiconductor infrastructure also carries significant economic and strategic value. Higher production capacity, skilled workforce development, employment generation, and export opportunities can position India as a trusted participant in the global semiconductor value chain. As additional facilities become operational and investments in research, innovation, and advanced manufacturing continue, India is creating an ecosystem that supports long-term technological competitiveness, industrial growth, and greater self-reliance in one of the world's most critical sectors.

(Sources: NDTV, The New Indian Express, News18)