CG Semi Shifts Gears: India’s Chip Ambitions Scale Up

Pearl Doshi - Gujarat Bureau Jul 05, 2026 1,550 Views

CG Power has begun commercial semiconductor chip shipments from its Sanand, Gujarat facility. Through a joint venture with Renesas and Stars Microelectronics, the company aims to scale production to 16 million chips daily by late 2026, supporting India's goal of building a comprehensive, self-reliant semiconductor ecosystem for the global market.

India's semiconductor manufacturing reaches a critical milestone as CG Semi begins commercial shipments and eyes massive capacity expansion.

SANAND, Gujarat — India’s semiconductor manufacturing journey has transitioned from aspirational to operational. CG Semi, a subsidiary of CG Power and Industrial Solutions, officially commenced commercial shipments of assembled semiconductor chips from its state-of-the-art Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat. This development marks a pivotal advancement in India’s efforts to integrate into the global semiconductor supply chain.

The Sanand facility, a joint venture between CG Power, Japan’s Renesas Electronics, and Thailand’s Stars Microelectronics, represents a total investment of approximately ₹7,600 crore. The first commercial consignment was successfully dispatched in June 2026, serving anchor customers including Renesas Electronics.

Scaling Production to Global Standards

Vellayan Subbiah, Executive Vice Chairman of CG Power, has outlined an aggressive roadmap for the facility. While the current pilot unit (G1) is processing roughly 0.5 million chips daily, the company is already deep into the construction of a larger second facility (G2). Once fully operational by the end of 2026, the combined capacity of both plants is projected to reach approximately 16 million chips per day.

"We have started shipping chips from India to the world," Subbiah stated, noting that the company is currently focused on qualifying its products for automotive, industrial, and consumer segments. He emphasized that achieving G1 qualification—a benchmark for high-reliability semiconductor components—is a key target for the next 18 to 24 months.

Prime Minister Inaugurates Commercial Output

On July 4, 2026, Prime Minister Narendra Modi formally inaugurated the commercial production at the Sanand facility. During the event, the Prime Minister highlighted that the plant is expected to produce 200 million chips annually, a figure set to grow as the India Semiconductor Mission (ISM) gains momentum.

"Step by step, brick by brick, and now chip by chip, India is moving from finished products to components and finally to semiconductors," the Prime Minister remarked. He added that the establishment of this semiconductor ecosystem in Gujarat is part of a broader vision to develop a comprehensive electronics value chain within the country.

Official Sources

"Our desire is that we can reach G1 qualification within the next 18 to 24 months," said Vellayan Subbiah, Executive Vice Chairman of CG Power.

Why It Matters

For India, the operational success of CG Semi’s OSAT facility signals a move toward reducing import dependence in the high-value electronics sector. By positioning Sanand as a technology cluster, India is attracting equipment suppliers, chemical manufacturers, and specialized startups, thereby building the foundational infrastructure required for a self-reliant electronics economy.

Key Facts at a Glance

Current Capacity: Pilot G1 facility processes ~0.5 million units per day.
Future Target: Combined G1 and G2 capacity to reach 16 million chips daily by late 2026.
Investment: ₹7,600 crore over five years under the India Semiconductor Mission.
Strategic Partners: Collaboration between CG Power, Renesas Electronics (Japan), and Stars Microelectronics (Thailand).
Job Creation: Expected to generate 2,000–3,000 direct jobs and 8,000–10,000 indirect roles.

FAQ

What is an OSAT facility?

OSAT (Outsourced Semiconductor Assembly and Test) facilities handle the final stages of chip production, including the assembly of the silicon die into a protective package and rigorous testing before the chips are shipped for use in electronics.

Which sectors will these chips serve?

The chips manufactured at the Sanand plant are designed for consumer electronics, automotive systems, industrial equipment, and power management applications.

What is the significance of "G1 qualification"?

Achieving G1 qualification is a high-level industry certification that indicates the chips meet the strict reliability and performance standards required for the most demanding applications, such as automotive and industrial machinery.

Source: The Economic Times, Financial Express, Business Standard