CG Power’s Semiconductor Venture Starts Production, Targets 5 Billion Chips a Year

CG Power & Industrial Solutions has started commercial production at its semiconductor joint venture, CG Semi Private Limited, marking an important milestone in the company's expansion into the semiconductor business. The facility, located in Sanand, Gujarat, was inaugurated by PM Modi today. The plant currently has the capacity to produce 200 million chips annually and is expected to scale up to 5 billion chips a year over time.

For investors, the commencement of commercial production signals that CG Power's semiconductor project has moved from the construction phase to operations. The next focus will be on capacity expansion, customer additions, and revenue contribution from the new business.

Commercial Operations Begin at Sanand Facility

CG Semi is a joint venture between CG Power & Industrial Solutions, Renesas Electronics, and Stars Microelectronics. The facility is an Outsourced Semiconductor Assembly and Test (OSAT) plant, where semiconductor chips are assembled, packaged, and tested before being supplied to customers.

According to the company, it has already begun shipping chips after receiving customer qualification approvals. The facility currently has an annual capacity of 200 million chips, with plans to gradually increase output to 5 billion chips annually.

Semiconductor Business Opens a New Growth Segment

CG Power has traditionally operated in the electrical equipment and engineering business. The operationalisation of the OSAT facility marks its entry into semiconductor manufacturing, a sector that has received policy support under the government's Semicon India Programme.

While the business is still at an early stage, scaling production, securing long-term customer orders, and improving capacity utilisation will be key factors determining its financial contribution over the coming years.

Management Sees Further Expansion

Executive Vice Chairman Vellayan Subbiah said the company has already started shipping chips from the Sanand plant. He also noted that India's semiconductor ecosystem requires development across chip design, wafer fabrication, and assembly and testing, while calling for greater industry participation.

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Conclusion

The start of commercial production is an operational milestone for CG Power as it diversifies beyond its core electrical equipment business. For investors, the development confirms that the company's semiconductor project is now operational. Future growth will depend on execution, customer wins, production ramp-up, and the pace at which the business begins contributing to the company's earnings.

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