Sanand: By the end of the year, CG Semi, a division of the Murugappa Group, plans to introduce the first Made-in-India chip, bringing India’s semiconductor aspirations from paper to reality. Chip prototypes will be released from pilot manufacturing lines this year by CG Semi, Micron, Tata Electronics, and Kaynes, with a commercial deployment to follow next year.
Within this year, the first four authorised units will all finish their pilot lines. In a Thursday media appearance, IT Minister Ashwini Vaishnaw stated, “Fab will take time.”
When CG Semi’s pilot Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat, opened, the announcement was made.
Pilot lines, or small-scale production setups used to test chip batches, are almost finished, while full-scale manufacturing facilities are still being developed.
The first chip to leave CG Semi’s plant is significant since, in February 2024, the government authorised the company’s request for 50% capital support.
The rollout was supposed to be led by Micron, which was approved for a $2.75 billion project in June 2023. Vaishnaw responded to the delays by saying, “The Micron plant is very big.” Within their unit, they have a sizable pilot line that will shortly be put into service.
According to official data, 10 semiconductor projects totalling ₹1.6 trillion in investment have been approved under the ₹76,000 crore India Semiconductor Mission (ISM). With a ₹66,000 crore investment, four projects are being established: the Micron, CG Semi, the Tata Electronics chip assembly plant in Assam, and the Kaynes OSAT plant.
It was not immediately possible to get in touch with Micron, Kaynes, or Tata Electronics for comment.
Push of the pilot line
At the Q1FY26 earnings call in July, Ramesh Kannan, MD of Kaynes Technology India, stated, “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.”
It is anticipated that Kaynes will begin commercial chip shipping during the current fiscal year’s fourth quarter. Three clients have been onboarded for the chip assembly business thus far, according to the company’s management during the call.
Additionally, Tata Electronics is investing ₹91,000 crore to establish a chip manufacturing plant in Dholera, Gujarat.
CG Semi is a member of the Murugappa Group and a subsidiary of CG Power and Industrial Solutions Ltd. CG Semi is spending more than ₹7,600 crore over five years to build two cutting-edge semiconductor factories in Sanand, Gujarat, in partnership with Renesas and Stars Microelectronics. The government contributes 50% of the enterprises’ capital under the Semiconductor Mission, with the state governments providing extra financial support.
The management of CG Power and Industrial Solutions stated that it would contribute approximately ₹1,700 crore to the overall investment during the results call with analysts to discuss the April–June quarter. It has so far employed roughly 170 people and invested ₹400 crore.
“Industries need to embrace domestically produced chips and help one another.” Vellayan Subbiah, chairman of CG Power, stated, “We must start moving towards making chips and using chips that are made here in India as India’s demand grows, whether in consumer electronics, automobiles, or appliances.”
India initially
Subbiah claims that China adopted the same strategy of employing domestically produced chips, with their industries sustaining their ecosystem. 0.5 million chip units may be produced daily by the company’s mini-plant, which was inaugurated on Thursday. By the next year, commercial production will begin. According to the business, another CG Power facility that is currently being built should be finished by the end of 2026.
The facility will grow to a daily capacity of roughly 14.5 million units once it is up and running. Over 5,000 direct and indirect employment are anticipated to be created by the two plants combined in the upcoming years, according to CG Semi.
CG Semi stated that the larger main plant will begin production in 2027 during an earnings call to discuss the April–June quarter.
