PIB: Published on 4 July 2026
Union Minister Ashwini Vaishnaw’s declaration that “India has entered a new era in semiconductors” carries substantial weight following the commencement of commercial production at CG SEMI’s OSAT (Outsourced Semiconductor Assembly and Test) facility in Sanand, Gujarat. This marks the third such plant to go live in 2026, signalling that India’s long-gestating semiconductor strategy is finally translating into tangible industrial output.
Momentum Building at Speed
The speed of execution stands out. Groundbreaking for the CG SEMI project occurred in March 2024; commercial production began roughly 27 months later. This facility, built with Japanese major Renesas Electronics, involves an investment exceeding ₹7,600 crore. It will produce chips for automobiles, scooters, and industrial equipment, with exports targeted at Japan, the United States, and Europe.
Prime Minister Narendra Modi’s personal visit to tour the clean room and unveil the production plaque underscores the strategic priority. With two more plants slated for inauguration soon and five expected to be operational by the end of 2026 out of 12 approved projects, India is moving from a near-zero base in commercial semiconductor manufacturing to a credible emerging player within a compressed timeframe.
Beyond Chips: Ecosystem and Social Dimensions
Vaishnaw correctly framed the project as more than a technical milestone. The employment of young women from Jharkhand, Chhattisgarh, Madhya Pradesh, Bihar, Jammu & Kashmir, Kerala, and Gujarat — who received specialised training in Malaysia — highlights an intentional push for inclusive growth. As India’s domestic training infrastructure matures, this dependency on overseas training should diminish, creating a virtuous cycle of skill development.
Broader ecosystem indicators are encouraging:
- 24 deep-tech chip design startups.
- Over 70,000 young people trained in chip design.
- 315 universities now offer relevant courses.
- A burgeoning electronics manufacturing sector approaching ₹13 lakh crore and supporting over 25 lakh jobs.
The upcoming first full semiconductor fab in Dholera adds further depth. OSAT facilities like CG SEMI focus on assembly, testing, and packaging — critical parts of the value chain that are less capital-intensive than wafer fabrication but essential for building scale and supply chain confidence.
Strategic Significance for Atmanirbhar Bharat
This progress strengthens India’s position in the global semiconductor value chain at a geopolitically opportune time. Global supply chain diversification away from over-reliance on East Asia continues, driven by security concerns and lessons from the 2021–2022 chip shortages. India’s combination of policy incentives (under the India Semiconductor Mission), state-level facilitation (Gujarat’s proactive role), and international partnerships (Renesas) is yielding results.
Success here has multiplier effects:
- Automotive and industrial sectors: Domestic chip supply reduces import dependence and enhances reliability.
- Exports: Early entry into global markets builds credibility.
- Technology sovereignty: Greater control over critical components for defence, telecom, and consumer electronics.
Realistic Assessment: Opportunities and Remaining Gaps
While the momentum is real, perspective is necessary. India is starting from a low base. The country still lacks advanced logic fabs capable of leading-edge nodes (sub-10nm or lower) dominated by TSMC, Samsung, and Intel. Most current projects focus on mature nodes, assembly, and design — important steps, but not yet full-spectrum capability.
Challenges remain:
- Infrastructure requirements (reliable power, ultra-pure water, logistics).
- Talent retention and advanced R&D depth.
- Competition from Vietnam, Malaysia, and renewed efforts in the US/Europe.
- Global cyclicality in the semiconductor industry.
The government’s approach — multiple projects across states, design ecosystem focus, and gradual scaling — appears pragmatic rather than overly ambitious.
The Road Ahead
The CG SEMI milestone, combined with the projected five plants by end-2026, represents a credible inflection point. If India sustains execution discipline, deepens partnerships, and continues investing in human capital, it can evolve from a peripheral player into a meaningful contributor in the global semiconductor supply chain.
For Atmanirbhar Bharat, this is not merely about reducing imports. It is about building foundational technological capabilities that support broader economic and strategic autonomy in the 21st century. The blend of industrial ambition, inclusive employment, and international collaboration on display in Sanand offers an optimistic template for India’s manufacturing journey.
The coming years will test whether this early momentum can be scaled into sustained global competitiveness. For now, the narrative has shifted from aspiration to implementation — a significant and welcome change.
