CG Semi Private Limited, a joint venture between CG Power and Industrial Solutions (Murugappa Group), Renesas Electronics Corporation and Stars Microelectronics, is among the few companies in the country that have started semiconductor production. On the sidelines of Semicon India 2026, Girish Chandra Chaturvedi, Chairman of the company, spoke to Rakesh Kumar about the company’s production plans, India’s semiconductor ecosystem and its participation in the India Semiconductor Mission 2.0. Edited Excerpts:
Production has started. How has the journey been so far?
Since this is a new sector, the journey has naturally had its ups and downs. Our smaller facility, G1, has already started production and is expected to reach its full capacity of 1.5 million chips a day in the next one or two months.
The bigger facility, G2, which is about 1.5 km from G1, is expected to start production around October-November 2027. There have been some teething troubles here and there, but the project has received strong support from both the Government of Gujarat and the Government of India, which has helped us reach this stage.
Since production has started but the ecosystem is still developing, how challenging has it been to source inputs such as chemicals and other materials?
The ecosystem includes allied industries such as paints, chemicals and other smaller requirements that will come up over time. Currently, we may be sourcing some of these inputs from outside the state or country.
However, under ISM 2.0, this ecosystem is being incentivised. Hopefully, it will develop quickly because these industries do not have the kind of long gestation period that a semiconductor manufacturing or testing facility requires. There is a ready market here, so people will see a lot of opportunities and these supporting industries will also come up.
At present, we are dependent on external suppliers, but that dependence should reduce over time.
Are you planning to participate in ISM 2.0?
Definitely, yes. Why not? However, our current focus is on completing our bigger plant, G2. Once that is operational, we can look at other opportunities.
If an opportunity comes up and we feel that certain components or activities need to be developed locally, we will certainly consider it.
Can you share more details about the bigger plant, G2?
G2 is also located in Sanand, Gujarat, about 1.5 km from our smaller plant. It is currently under construction.
The installation and erection of machines, testing, and creation of the required environment and facilities will take at least a year. That is why we expect production to begin around October-November 2027.
You were among the first companies to make a significant investment in semiconductor technology in India. Where do you see India today in terms of semiconductor development, from the industry's perspective?
There is no doubt that all of this was required. At times, we feel that this should have happened 10 or even 20 years ago. But it is never too late to start.
This is now the time when the government is paying a lot of attention and supporting the industry to reach global standards. We will be there very soon.
Once we establish ourselves, we can move ahead and enter areas similar to what is happening in countries such as Taiwan, China and the United States.
What is your current production, and what will be the annual capacity?
Full capacity will be achieved when G2 starts production. Currently, G1 has a capacity of about 7.5 million chips per month.
There was also a plan to start a plant in Kerala. What happened to that?
That is not currently a priority. Our immediate priority is to complete G2 and start production.
How many semiconductor fabs do you think India should have?
A fab requires a very different kind of investment and expertise. Hopefully, once the Tata plant starts manufacturing, others will also start coming in.
Fab manufacturing is highly technical and sophisticated and requires very heavy investment. For comparison, the investment in our plant is roughly ₹8,000 crore, whereas a fab can require an investment of around ₹90,000 crore. That shows the scale of the difference.
It has to be taken up, and hopefully, we will see more fabs coming up. It is always better to have the entire semiconductor value chain developed.
The fab is the starting point, then you have OSAT—assembly and testing—and finally, the chips go into various applications. We are currently in the middle of that chain.
In very simple terms, what exactly does your plant produce?
We receive the manufactured semiconductor chips and provide the necessary connections. This involves wire bonding, which is part of the assembly process.
We then make the chips damage-proof and ensure they are protected from different factors. Every chip also has to be tested before it is sent out for use.
So, essentially, assembly and testing are the two basic activities carried out at an OSAT plant. That is what we are doing.
A fab is a completely different area and requires a different level of technology and investment.
Do you think India should develop the semiconductor ecosystem in multiple locations rather than concentrating too much in one place?
Yes, you are right. We should have one or two more centres as well. It could be in Hyderabad, Amaravati, Chennai or somewhere else. It is quite possible.
For example, the Government of Tamil Nadu is also keen to have semiconductor facilities. Once the semiconductor environment is established in the country and companies understand how these facilities can be developed and operated, activities will start moving to other locations as well.
Why should everything be concentrated in one place? Allied industries are currently coming to Gujarat because there is a ready market here.
But once some of these facilities move to other states, India is a large country and can support two, three or even four semiconductor centres. There is no problem with that.
