Prime Minister Narendra Modi virtually laid the foundation stone and unveiled the plaque for ASIP Technologies’ semiconductor manufacturing facility at Tarluvada, Visakhapatnam.

The Rs 25 billion Outsourced Semiconductor Assembly and Test (OSAT) project is Andhra Pradesh’s and South India’s first semiconductor manufacturing facility approved under the India Semiconductor Mission (ISM 1.0).

Andhra Pradesh Chief Minister N Chandrababu Naidu joined the Prime Minister virtually for the foundation stone ceremony.

Amitesh Kumar Sinha, CEO, India Semiconductor Mission, Government of India, and Bhaskar Katamneni, IAS, Secretary, IT, Electronics and Communication, Government of Andhra Pradesh, attended the ceremony along with senior government officials, industry leaders and global partners.

The 30-acre facility is being established with an initial investment of over Rs 4.6 billion in partnership with APACT Co. of South Korea, which will serve as the project’s technology partner.

The facility will have an annual production capacity of 96 million chips and serve high-growth sectors including artificial intelligence, high-performance computing, data centres and high-speed communications.

ASIP also plans to expand the facility with an additional investment of over Rs 20 billion to scale up its advanced semiconductor packaging operations.

The project is expected to create over 1,000 direct high-skilled jobs and 1,600 indirect jobs.

Once operational, ASIP will commence production using wire-bond and Flip-Chip Ball Grid Array packaging technologies. It plans to introduce advanced 2.5D and 3D packaging capabilities within two to three years.

In his address, Prime Minister Narendra Modi commended Andhra Pradesh’s software and information technology talent pool. He said the establishment of the semiconductor manufacturing facility positioned the state to lead in semiconductor manufacturing.

He added that the government was committed to supporting this emerging manufacturing growth story, which forms an important part of the Viksit Bharat mission.

Amitesh Kumar Sinha applauded ASIP for breaking ground on the facility, describing it as an important contribution towards advancing the India Semiconductor Mission and bringing advanced semiconductor packaging capabilities to Visakhapatnam, Andhra Pradesh.

He reaffirmed the India Semiconductor Mission’s commitment to supporting the project through growth-driven industry policies.

Venkata Simhadri, Managing Director and CEO of ASIP, said: “The groundbreaking of our Visakhapatnam facility marks a significant milestone for ASIP and our commitment to strengthening India’s semiconductor manufacturing capabilities.

“We thank the Government of India, MeitY, the India Semiconductor Mission and the Government of Andhra Pradesh for their support and confidence in this project. Together with our partner APACT, we are establishing advanced assembly, packaging and testing capabilities in India while driving skill development, supply-chain localisation and contributing to the growth of Andhra Pradesh’s semiconductor ecosystem.”

Seong Dong Lee, CEO and President of APACT, said, “The semiconductor industry is increasingly looking for resilient and diversified supply chains. Our partnership with ASIP combines Korean technology expertise with India’s engineering talent and manufacturing ambition. We believe this facility will become an important part of India’s Semiconductor Mission and the global semiconductor ecosystem, providing advanced packaging and testing solutions to customers globally.”

India currently imports virtually all semiconductor chips used by its electronics industry. The OSAT facility addresses a critical gap in the country’s semiconductor value chain, where packaging and testing account for approximately 30 per cent to 40 per cent of a chip’s manufacturing cost.

The company expects to localise a significant portion of its supply chain over the next three to five years while building partnerships with academic institutions, including IIT Tirupati and IIT Hyderabad.

The facility will also include an in-house semiconductor training centre aimed at developing a skilled workforce for India’s growing semiconductor sector.

Sustainability features, including solar power generation and water-recycling systems, will be integrated into the project, with the goal of establishing a high-standard, environmentally responsible manufacturing operation.