CG Semi starts G1 OSAT production at Sanand in 2026

Commercial production begins in Sanand

CG Semi Private Limited has commenced commercial production at its G1 Outsourced Semiconductor Assembly and Test (OSAT) facility in Sanand, Gujarat. The company is a joint venture between CG Power and Industrial Solutions Ltd (Murugappa Group), Renesas Electronics Corporation, and Stars Microelectronics. The start of commercial operations is a key operational milestone for India’s semiconductor packaging and testing ecosystem. It also places another large semiconductor facility into active production in Gujarat’s Sanand cluster.

The announcement was made from Sanand and described the plant as positioned to serve customers globally. CG Semi said the facility has moved through installation and readiness steps since its inauguration. Commercial production now marks the transition from commissioning and qualification work to revenue-generating operations.

High-profile launch event and first batch of chips

The commercial production launch was held in the presence of Prime Minister Narendra Modi, Gujarat Chief Minister Bhupendra Patel, and Union Minister Ashwini Vaishnaw (Railways, Information and Broadcasting, and Electronics and Information Technology). Reporting around the event noted that the Prime Minister was presented with the first batch of chips manufactured at the facility. Those chips are set to be exported to Japan.

The presence of senior central and state leadership underscores how OSAT capacity is being treated as strategic infrastructure under India’s broader semiconductor push. For investors tracking India’s electronics manufacturing build-out, the event signals that projects announced over the last two years are moving from approvals to operations.

What CG Semi’s G1 OSAT facility can do

CG Semi describes G1 as an end-to-end OSAT facility, covering chip assembly, packaging, testing, and post-test services. Company-linked material also states the plant uses high-yield equipment and a Manufacturing Execution System (MES) aimed at Level 1 automation and traceability. In-house labs for reliability and failure analysis were also mentioned.

The facility has reportedly been progressing through equipment installation, process stabilization, workforce training, customer qualification, and quality readiness. These steps matter in OSAT because customers typically require qualification lots and stable yields before moving to full production volumes.

Capacity: reported peak levels and how to read them

CG Semi has communicated a peak capacity of up to 300 million units per year for the G1 facility. Separately, another description of the same site references peak capacity of approximately 0.5 million units per day. The company’s longer-term plan is tied to a second plant, G2, which is under development and intended to scale output significantly once operational.

In addition to G1’s peak output claims, other reporting and company material mention larger multi-year targets once both facilities ramp. One source close to the project said the second facility, due 2027, could take combined capacity to roughly 4 billion chips annually. Another company statement refers to an installed capacity of up to 4.7 billion units annually over the next five years.

Investment plan: ₹7,600 crore over five years

CG Semi said it is investing over ₹7,600 crore over five years to develop two OSAT facilities in Sanand, G1 and G2. The project is backed by central and state government support and implemented with its joint venture partners. The investment size has also been described as more than USD 870 million over five years.

The company’s messaging frames the two-plant program as a scale play: G1 is now in commercial production, while G2 is expected to lift capacity materially once it comes online. The G2 plant is positioned as the next phase of the Sanand OSAT build-out.

Timeline: approvals, inauguration, and ramp-up

Project commentary included a reference to approval from the Government of India in November 2024. G1 was inaugurated in August 2025, after which it moved through commissioning steps such as equipment installation and process stabilization. Commercial production was inaugurated on July 4, with the facility now described as operational.

This sequencing is typical for OSAT plants, where time is required between inauguration and stable commercial production due to equipment tuning, process windows, training, and customer qualification.

Certifications and automotive-grade readiness

CG Semi has stated that the facility is undergoing ISO 9001 and IATF 16949 certification. These certifications are closely watched in supply chains that serve automotive and industrial applications. They also influence the kind of customers an OSAT can win, especially for high-reliability use cases.

Another project note suggested the expanded capacity from G2 is expected to cater primarily to the automotive industry, industrial infrastructure, and IoT applications. While customer names were not disclosed, the stated focus areas align with where packaging and test demand is growing.

Cluster context: Sanand’s semiconductor manufacturing build-up

Sanand has increasingly been positioned as a semiconductor manufacturing hub. The coverage also referenced Micron Technology’s inauguration of India’s first large-scale ATMP facility in Sanand, highlighting that multiple packaging and test projects are being concentrated in the same geography.

For India’s semiconductor strategy, this matters because OSAT and ATMP capacity supports a broader electronics supply chain, even when wafer fabrication remains limited domestically. Packaging, testing, and export shipments can still create significant industrial activity.

Market impact: what this means for CG Power and the ecosystem

CG Semi is a subsidiary venture linked to CG Power and Industrial Solutions Limited (NSE: CGPOWER, BSE: 500093). The development is operationally significant because it converts a high-capex project into an operating asset, which is a key derisking step for large manufacturing investments. Company material also referenced CG Power’s FY24 revenue exceeding ₹8,000 crore, underlining the parent’s manufacturing scale in India.

Broader ecosystem impact is tied to jobs and supplier development. Separate communications around the project referenced 2,500+ direct jobs and 5,000+ direct and indirect jobs linked to the two-facility build-out, though these figures were presented as project expectations rather than audited employment disclosures.

Key facts at a glance

Why the milestone matters

India’s semiconductor policy push depends on converting announced projects into stable production, customer qualifications, and export flows. In that context, commercial production at G1 is a concrete milestone, not just an inauguration event. The mention of exports to Japan also signals cross-border customer acceptance for early lots, which can support future qualification programs.

Next milestones will likely revolve around customer qualification expansion, certification completion, and the development timeline for G2. CG Semi has already stated that G2 is under development and intended to significantly scale capacity once operational.