“All the first four units that got approved are going to complete their pilot line within this year. Fab will take time,” IT minister Ashwini Vaishnaw said in a media interaction on Thursday.
The announcement came during the launch of CG Semi’s pilot Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat.
While full-scale fabrication facilities are still in development, pilot lines or small-scale production setups used to test chip batches are nearing completion.
The first chip coming out of CG Semi’s plant assumes significance as the company’s project was approved for 50% capital support from the government in February 2024.
Micron, which received approval for a $2.75 billion project in June 2023, was expected to lead the rollout. Addressing delays, Vaishnaw said, “The Micron plant is very big. They have a large pilot line within their unit, which will get commissioned very soon.”
Under the ₹76,000 crore India Semiconductor Mission (ISM), 10 semiconductor projects have been approved with a total investment of ₹1.6 trillion so far, according to government data. Four projects—Micron, CG Semi, Tata Electronics chip assembly plant in Assam, and Kaynes OSAT plant—are being set up with an investment of ₹66,000 crore.
Micron, Kaynes and Tata Electronics could not be immediately reached for comments.
Pilot line push
“Our OSAT facility in Sanand is almost there with proto (prototype) products for AOS (Alpha and Omega Semiconductors Ltd) and is on track to be fully operational for commercial production by December 2025,” said Ramesh Kannan, MD Kaynes Technology India, during the Q1FY26 earnings call in July.
Kaynes is expected to start shipping chips commercially in the fourth quarter of the current financial year. The company’s management said during the call that it has onboarded three clients for the chip assembly business so far.
Further, Tata Electronics is also setting up a chip fabrication plant in Gujarat’s Dholera at an investment of ₹91,000 crore.
CG Semi is a subsidiary of CG Power and Industrial Solutions Ltd and part of the Murugappa Group. In collaboration with Renesas and Stars Microelectronics, CG Semi is investing over ₹7,600 crore over five years to develop two state-of-the-art chip facilities in Sanand, Gujarat. Under the Semiconductor Mission, the government provides 50% capital support to the companies, with additional fiscal support from the state government.
During the earnings call with analysts to discuss the April-June quarter, CG Power and Industrial Solutions’ management said its contribution to the total investment would be around ₹1,700 crore. So far, it has invested ₹400 crore and employed about 170 people.
“Industries must support each other and embrace domestically made chips. As India’s demand grows, whether in consumer electronics, automobiles, or appliances, we must start moving towards making chips and using chips that are made here in India,” said Vellayan Subbiah, CG Power chairman.
India first
According to Subbiah, China also followed the same concept of using locally made chips, wherein their industries supported their ecosystem. The company’s mini-plant, which was launched on Thursday, will have a capacity of 0.5 million chip units per day. It will start commercial production by next year. Another facility of CG Power, which is under construction, is expected to be completed by the end of 2026, the company said.
Once operational, the facility will scale up to a capacity of about 14.5 million units per day. Together, the two facilities are projected to generate over 5,000 direct and indirect jobs in the coming years, CG Semi said.
In an earnings call to discuss the April-June quarter, CG Semi said the larger main plant will start production in 2027.
