India’s Semiconductor Moment: Beyond the Hype, a Foundation for Long-Term Growth 

India has aligned government support, private investment, and global ambition to create a viable foundation for its semiconductor industry. CG Power’s new pilot OSAT facility embodies this shift, starting small to build crucial trust with global clients through a proven, qualification-focused approach. Success hinges on overcoming challenges like attracting international customers and bridging the initial talent gap, potentially leveraging the influential Indian diaspora.

This endeavor requires a long-term mindset from entrepreneurs, prioritizing national industrial growth over quick profits. Ultimately, the strategy leverages geopolitical shifts and India’s enduring cost advantages to establish a resilient, full-value-chain ecosystem for the decades to come.

India’s Semiconductor Moment: Beyond the Hype, a Foundation for Long-Term Growth 

For decades, the global semiconductor industry was a story India watched from the sidelines. While the country excelled in chip design and software, the high-stakes, capital-intensive world of manufacturing—the fabs (fabrication plants) and OSATs (Outsourced Semiconductor Assembly and Test) facilities—remained a distant dream. That chapter is now closing. 

As Vellayan Subbiah, Chairman of CG Power, recently stated at the launch of CG Semi’s pilot OSAT facility in Ahmedabad, “All systems are in place for India’s semiconductor growth.” This isn’t just corporate optimism; it’s a recognition that a rare alignment of government intent, private ambition, and global geopolitical shifts has created a window of opportunity. The question is no longer “if,” but “how” and “how quickly” Indian entrepreneurs will leverage it. 

The OSAT Gambit: Starting Small to Win Big 

CG Semi’s new pilot facility is a masterclass in pragmatic ambition. Instead of launching at full scale, they’ve started with a “mini-plant” capable of 500,000 units per day—a deliberate move to de-risk the venture. 

This pilot serves a critical purpose: building trust. As Subbiah explains, the semiconductor development cycle with a new customer can take 12-18 months. Global companies, used to the established ecosystems of Taiwan and Malaysia, are naturally hesitant to be a first customer. This pilot is a living showroom where potential partners can audit processes, check equipment, and validate output quality firsthand. With anchor customer Renesas beginning its qualification process, CG is taking the essential first steps to prove India’s mettle on the global stage. 

The Triad of Challenges: Trust, Talent, and Tenacity 

Subbiah’s insights reveal a clear-eyed view of the hurdles ahead: 

• Winning Trust: The biggest challenge isn’t technology or capital; it’s convincing global supply chain managers to bet on India. The solution, Subbiah suggests, may lie within. “The answer to this also lies in the Indian diaspora,” he notes, drawing a parallel to the Chinese diaspora’s role in building China’s manufacturing prowess. Indians in leadership positions at global tech firms can be powerful ambassadors for India’s capability. 

• Bridging the Talent Gap: India has a strong foundation in engineering, but hands-on experience in semiconductor manufacturing is scarce. CG’s approach is twofold: importing senior expat talent to lead the initial operations while aggressively upskilling a local workforce. They’ve sent early hires abroad for training, building the knowledge base that will be crucial for scaling to the planned 2,200 direct jobs. 

• Navigating Geopolitics: With new tariffs and trade tensions emerging unpredictably, long-term planning requires a new level of conviction. Subbiah calls for a return to the post-independence industrial mindset—a breed of entrepreneur focused on “country’s long-term growth” over quick profits. 

Why This Time is Different: India’s Strategic Symbiosis 

Previous attempts to kickstart semiconductor manufacturing in India failed to gain traction. What’s different now? 

• Holistic Value-Chain Focus: India is not putting all its eggs in one basket. The government’s strategy supports the entire ecosystem—chip design, fabrication (fabs), and assembly/test (OSAT). This creates a synergistic network where each segment supports the others, making the entire chain more resilient. 

• The Geopolitical Dividend: The global drive for geographic diversification of supply chains (often termed “China Plus One”) is a powerful tailwind. Companies are actively seeking alternatives, and India, with its democratic credentials and stable economy, is a prime candidate. 

• Enduring Cost Advantage: While start-up costs are high, India’s “benign wage rate inflation,” as Subbiah puts it, offers a sustainable long-term cost advantage that can make it a globally competitive manufacturing base for decades to come. 

The Long Game: A Lesson for Indian Entrepreneurship 

The most profound takeaway is a lesson in strategic patience. Subbiah reveals that CG Power’s foray into semiconductors wasn’t some pre-ordained masterplan. “Not at all! In hindsight, it may look strategic. Absolutely the opposite,” he admits. It was a willingness to embrace a good asset and a complex turnaround that led them to this point. 

This underscores a critical insight: India’s next growth wave won’t be built by those seeking easy wins. It will be built by leaders and companies willing to play the long game—to invest in complex technologies, build deep capabilities, and navigate the inevitable volatility of global markets. 

The foundation is poured. The machinery is being installed. The first trained technicians are at their stations. The systems are, indeed, in place. The future of India’s semiconductor industry now depends on its entrepreneurs’ ability to look beyond the quarterly earnings report and build the technologies that will power the nation’s next half-century.