Union Parliamentary Affairs Minister Kiren Rijiju on Saturday, 4 July 2026 shared a live broadcast link as Prime Minister Narendra Modi inaugurated the CG Semi Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat, marking a significant milestone in India's semiconductor manufacturing drive.

Context

The inauguration of the CG Semi OSAT facility at Sanand adds a new node to India's rapidly expanding semiconductor ecosystem. Sanand has emerged as one of Gujarat's most active industrial corridors, already hosting major automobile and electronics manufacturers, and the addition of a semiconductor assembly and test unit deepens its strategic industrial profile.

An OSAT facility handles the packaging, assembly, and testing of semiconductor chips — the final stages of the chip-making process — and is critical for building an end-to-end domestic supply chain. Until now, Indian electronics manufacturers have largely depended on overseas OSAT capacity, primarily in Taiwan, South Korea, and Malaysia.

Policy Backdrop

The facility's inauguration is a direct outcome of the India Semiconductor Mission (ISM), approved in December 2021 with a total outlay of Rs 76,000 crore to attract investments in semiconductor and display manufacturing. The mission operates under the broader Atmanirbhar Bharat and Make in India frameworks championed by the Modi government since 2014.

Under the ISM, the central government offers fiscal support covering a substantial share of project costs for approved semiconductor units. Gujarat has been among the most proactive states in facilitating land, utilities, and regulatory clearances to attract these capital-intensive projects, positioning itself as India's primary semiconductor investment destination.

The commissioning of an OSAT unit is seen as a foundational step: while full-scale chip fabrication (fab) requires far greater capital and technology depth, OSAT capacity allows India to participate meaningfully in global semiconductor supply chains in the near term and build indigenous technical expertise.

Stakeholders and Impact

The electronics and semiconductor manufacturing industry stands to gain immediate upstream support, as domestic OSAT capacity reduces dependence on foreign assembly and test services, shortening supply chains and lowering logistics costs. Consumer electronics, automotive electronics, defence, and telecom sectors — all heavy consumers of packaged chips — are among the primary downstream beneficiaries.

For Gujarat, the facility reinforces the state's reputation as a preferred destination for high-technology investment and is expected to generate skilled employment in precision manufacturing and quality engineering. Broader spillover effects in ancillary industries — specialised chemicals, precision tooling, logistics — are also anticipated for the Sanand region.

India's ambition to become a credible alternative to established Asian semiconductor hubs also carries geopolitical weight, as global supply-chain diversification pressures — accelerated by recent disruptions — push multinational chipmakers and their customers to seek new assembly and test partners.

What's Next

Attention will now turn to the commissioning timelines and ramp-up of capacity at the CG Semi facility, as well as the progress of other semiconductor projects approved under the India Semiconductor Mission. Analysts and industry stakeholders will also watch for any additional production-linked incentives or budgetary support in upcoming Union Budgets to sustain investment momentum.

With India's semiconductor ambitions firmly embedded in long-term industrial policy, the Sanand inauguration signals that the country's transition from a chip-consuming nation to a chip-making one — however gradual — is now moving from blueprint to brick and mortar.