India opens its first major semiconductor packaging plant as Modi inaugurates CG Semi’s OSAT facility

India just entered the semiconductor manufacturing chat. Prime Minister Narendra Modi is inaugurating CG Semi’s OSAT (Outsourced Semiconductor Assembly and Test) facility in Sanand, Gujarat, on July 4, 2026, marking the start of commercial production at one of the country’s first major chip packaging plants.

The facility represents a ₹7,600 crore investment, roughly $870 million, backed by a joint venture between CG Power and Industrial Solutions, Japan’s Renesas Electronics America, and Thailand’s Stars Microelectronics. It’s being built under the India Semiconductor Mission, the government’s ambitious plan to stop being entirely dependent on foreign chips.

What’s actually being built here

OSAT covers assembly, testing, and packaging — critical steps in the semiconductor supply chain, but not the same as fabricating chips from scratch.

CG Semi’s G1 pilot plant is already operational with a daily production capacity of approximately 0.5 million units. The facility is targeting a peak annual capacity of 4.7 billion units over the next five years. A second facility, dubbed G2, is expected to come online by the end of 2026, which would significantly expand output.

The plant will handle chip packaging for automotive, industrial, consumer electronics, telecommunications, 5G, IoT, and power sectors.

CG Semi has already started exporting assembled chips to Malaysia ahead of the formal inauguration.

India’s semiconductor cluster takes shape

Sanand is becoming a focal point for India’s semiconductor activities. The CG Semi facility joins other recent developments in the same area, including projects by Micron, which inaugurated its ATMP facility earlier in 2026, and Kaynes Semicon.

India’s push into semiconductors was accelerated by the global chip shortage of 2020–2023, which exposed vulnerabilities for countries dependent on a handful of manufacturing hubs. India, which imports nearly all of its semiconductors, responded with the India Semiconductor Mission, which offers financial incentives to companies willing to set up chip manufacturing and packaging facilities on Indian soil.

Why crypto and tech investors should pay attention

For investors focused on India’s tech sector, CG Power — the publicly traded Indian company that is part of the joint venture behind CG Semi — stands to benefit directly from the facility’s expansion. India’s heavy reliance on semiconductor imports also creates vulnerability during supply crunches and adds to the country’s trade deficit; domestic production scaling reduces that exposure.

The G1 plant’s current daily output of 0.5 million units is a fraction of what global OSAT leaders like ASE Group or Amkor Technology produce. Reaching the 4.7 billion annual unit target will require sustained investment and operational development over several years. The fact that chips are already being exported before the formal inauguration indicates production is active, not merely announced.

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