CG Power, Renesas Electronics, and Stars Microelectronics launch semiconductor manufacturing JV in India
In a significant move towards bolstering India’s semiconductor manufacturing capabilities, CG Power and Industrial Solutions Limited (“CG”), Renesas Electronics Corporation (“Renesas”), and Stars Microelectronics (Thailand) Public Co. Ltd (“Stars Microelectronics”) have inked a Joint Venture Agreement (JVA). This strategic alliance aims to establish and operate an Outsourced Semiconductor Assembly and Test (OSAT) facility in India. The Union Cabinet, under Prime Minister Narendra Modi’s chairmanship, granted approval for this venture on February 29, 2024, marking a pivotal step under India’s ambitious Semiconductor scheme.
The joint venture, predominantly owned by CG with a 92.3% stake, sees Renesas and Stars Microelectronics holding approximately 6.8% and 0.9% equity capital, respectively. With a planned investment of INR 7,600 crores over the next five years, the JV is set to finance this ambitious project through a combination of subsidies, equity, and potential bank loans as necessary. This investment underscores the partners’ commitment to fostering a robust semiconductor ecosystem within India.
The JV will establish a state-of-the-art manufacturing facility in Sanand, Gujarat, aiming for a production capacity of up to 15 million units per day. The facility will manufacture a broad spectrum of products, from legacy packages like QFN and QFP to advanced packages including FC BGA and FC CSP, catering to diverse industries such as automotive, consumer, industrial, and 5G technologies.
S. Vellayan, Chairman of CG Power and Industrial Solutions Limited, expressed enthusiasm about CG’s foray into semiconductor manufacturing, highlighting the strategic diversification and the steep learning curves provided by the partnership with Renesas and Stars Microelectronics. “This is a very exciting phase for the entire nation, and we are very keen to build out India’s semiconductor capability and ecosystem,” Vellayan remarked.
Echoing the sentiment, Natarajan Srinivasan, Managing Director of CG Power and Industrial Solutions Limited, noted the project’s national significance and expressed pride in CG’s involvement. Renesas CEO, Hidetoshi Shibata, emphasized India’s critical role in Renesas’ business strategy, committing to accelerate investment in India and strengthen the semiconductor ecosystem alongside the Murugappa Group and Stars Microelectronics. Prompong Chaikul, Chairman of the Executive Committee of Stars Microelectronics, also expressed honor in joining the venture, pledging robust support for the project’s success in India.
This joint venture represents a significant stride in India’s endeavor to become a global hub for semiconductor manufacturing. By combining CG’s manufacturing expertise, Renesas’ advanced semiconductor technology, and Stars Microelectronics’ OSAT experience, the JV is well-positioned to make a substantial impact on India’s technological and economic landscape. Moreover, the strategic location in Gujarat, known for its business-friendly environment, further enhances the project’s potential for success.
This collaboration not only aims to meet the burgeoning global demand for semiconductors but also positions India as a key player in the global semiconductor supply chain. As the project unfolds, its success will likely attract further investments and partnerships, catalyzing the growth of India’s semiconductor sector.