Prime Minister Narendra Modi is set to inaugurate commercial chip production at CG Semi's Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat, on 4 July, marking a significant milestone in India's accelerating semiconductor manufacturing drive. The plant, backed by a ₹7,500 crore investment and approved under the India Semiconductor Mission in February 2024, is poised to supply chips to customers both domestically and internationally.

What the CG Semi Facility Will Produce

CG Semi Pvt. Ltd., a subsidiary of CG Power and Industrial Solutions Limited, developed the Sanand plant in partnership with Japan's Renesas Electronics and Thailand's Stars Microelectronics. The facility will manufacture both legacy chip packages — QFN and QFP — and advanced formats including FC-BGA and FC-CSP, serving sectors such as automotive, electronics, industrial equipment, 5G infrastructure, and power applications.

A second CG Semi plant is currently under construction. Together, the two OSAT facilities are expected to produce a combined 1.5 crore chips per day once fully operational.

Jobs and Economic Impact

The facility currently employs more than 300 people and is projected to generate around 5,000 direct and indirect employment opportunities over the next five years. This positions the project as a meaningful contributor to India's broader goal of building domestic semiconductor talent and supply chains, not merely production capacity.

What PM Modi Said

Modi described India's semiconductor drive as a defining phase for the country's technological trajectory. 'Sanand has made a place for itself on the world map, synonymous with cutting-edge innovation and growth,' he said, calling the CG Semi launch 'a momentous occasion for India's efforts in semiconductor manufacturing.'

Articulating the broader ambition, Modi said: 'Our objective is not limited to setting up just one factory, but to creating an entire ecosystem. India is now focusing on the entire semiconductor value chain, from design engineers to machine manufacturers and logistics. The announcement of India Semiconductor Mission 2.0 is a major step in this direction.' He added that growing manufacturing would increase domestic demand for materials and components, creating 'the biggest opportunity for domestic industries.'

Sanand's Rise as India's Chip-Packaging Cluster

The CG Semi launch adds to a rapidly thickening semiconductor ecosystem in Sanand. Micron Technology's ATMP facility and Kaynes Semicon's OSAT plant have already commenced operations in the region. Once associated almost exclusively with automobile manufacturing, Sanand is increasingly recognised as India's first chip-packaging cluster and a node in the global semiconductor value chain.

Gujarat was the first Indian state to announce a dedicated semiconductor policy and has so far seen six projects approved under the India Semiconductor Mission — Tata Electronics, Micron Technology, CG Semi, Kaynes Semicon, Suchi Semicon, and Crystal Matrix — representing a combined investment of USD 14.7 billion. The state government attributes this momentum to dedicated policies, faster approvals, modern infrastructure, and business-friendly governance.

What Comes Next

With India Semiconductor Mission 2.0 now announced, the policy framework is expanding beyond assembly and testing toward design, logistics, and research. The Sanand cluster's trajectory will be closely watched as a test case for whether India can build a self-sustaining semiconductor value chain — or whether it remains anchored at the lower-complexity end of chip packaging. Industry observers note that the real measure of success will be how quickly domestic chip demand absorbs locally produced output.