CG Power seeks approval for $791 mn semiconductor facility in India

  • Industry News
  • Nov 24,23
The company relayed this information through a statement to the stock exchange, indicating the submission of the application to the Ministry of Electronics and Information Technology.
CG Power seeks approval for $791 mn semiconductor facility in India

On November 23, CG Power and Industrial Solutions disclosed its application to establish an outsourced semiconductor assembly and test facility in India, involving an investment of approximately $791 million over a five-year period. The company relayed this information through a statement to the stock exchange, indicating the submission of the application to the Ministry of Electronics and Information Technology and the quest for subsidies for the project.

In the official filing, CG Power and Industrial Solutions stated, "We wish to inform you that the Company has today filed an application with the Ministry of Electronics and Information Technology (MeitY), Government of India seeking approval to set up an Outsourced Semiconductor Assembly and Test (OSAT) facility and the grant of subsidy for the said project under the modified scheme for setting up compound semiconductors/silicon photonics/sensors fab/discrete semiconductors fab and semiconductor assembly, testing, marking and packaging (ATMP) facilities in India."

Subsequent to this announcement, the company's shares experienced a surge of around 20%, reaching Rs 469 and hitting a 52-week high.

CG Power and Industrial Solutions clarified that the project's funding is anticipated to come from a combination of subsidies, equity contributions from joint venture partners, and debt, as needed. Ongoing discussions are in progress regarding these financial aspects, the company confirmed.

In the broader context of India's Semiconductor Mission launched in 2021, several companies and joint ventures, including Tata Group, Vedanta, Foxconn, TSMC, L&T, Qualcomm, Micron Technology, Simmtech, Sahasra Semiconductor, and AMD, have expressed their intentions to establish semiconductor assembly and fabrication units. Some have already declared their capital commitments. However, experts have raised concerns that these units may focus more on assembly than actual semiconductor manufacturing in India, potentially undermining the objectives of the mission.

Source: Money Control

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