Infineon & Onsemi Eye India: Semiconductor Giants Seek Local Partners for OSAT Expansion

Infineon and Onsemi are exploring partnerships with Indian firms to establish OSAT (Outsourced Semiconductor Assembly and Test) facilities, aligning with India’s growing semiconductor industry. Infineon recently partnered with Mohali-based CDIL Semiconductors to supply bare wafers for power chipset packaging, a move seen as a potential step toward expanding its OSAT presence. A source suggested Infineon may also focus on India’s automotive sector. Meanwhile, Onsemi is keen on an OSAT partnership where an Indian firm funds the facility while Onsemi provides technical expertise.

Though both companies declined to confirm specific plans, India’s semiconductor ecosystem is strengthening under the India Semiconductor Mission (ISM), which has already approved three OSAT plants, including Tata Group’s Rs 27,120 crore unit in Assam. Infineon reported $15 billion in revenue in 2024 with 58,000 employees globally, while Onsemi, despite revenue declining from $8.2 billion in 2023 to $7 billion in 2024 and announcing 2,400 job cuts, recently made a $6.9 billion bid to acquire Allegro MicroSystems. These developments highlight India’s increasing role in global semiconductor manufacturing.

Infineon & Onsemi Eye India: Semiconductor Giants Seek Local Partners for OSAT Expansion

Global semiconductor giants Infineon Technologies, headquartered in Germany, and Onsemi, based in the United States, are exploring potential partnerships with Indian companies to develop Outsourced Semiconductor Assembly and Testing (OSAT) facilities in India. This strategic interest aligns with India’s accelerating efforts to position itself as a key player in the global semiconductor supply chain, supported by government-led initiatives such as the India Semiconductor Mission (ISM).

Infineon’s Strategic Moves in India

Infineon, a leader in power semiconductor technology, is actively evaluating opportunities to expand its OSAT footprint in India. The company recently entered into a partnership with Chandigarh-based CDIL Semiconductors to supply raw semiconductor wafers, which CDIL will process and package into power chipsets. Industry experts view this collaboration as a foundational step toward Infineon’s broader ambitions within India’s semiconductor ecosystem.

The company’s expertise in power semiconductors, particularly for automotive applications, positions it to capitalize on India’s growing electric vehicle (EV) market and industrial automation sector. A source close to the discussions highlighted that Infineon’s focus on automotive innovation could drive deeper investments in local manufacturing infrastructure. However, when asked about specific plans, an Infineon spokesperson reiterated that while India remains a priority market and innovation hub, the company has not yet finalized any manufacturing commitments. They emphasized ongoing evaluations of global partnerships but declined to disclose further details.

Onsemi’s Collaborative Approach

Onsemi, another key player in the semiconductor industry, is similarly exploring avenues to strengthen its presence in India. Sources indicate that the Arizona-based firm is considering a collaborative framework where an Indian partner would finance the establishment of an OSAT facility, while Onsemi provides technical expertise and operational support. This model would allow Onsemi to expand its capabilities without significant capital investment, leveraging its brand strength and technological proficiency.

This strategy comes amid a broader restructuring phase for Onsemi, which recently announced workforce reductions affecting 2,400 employees. The company reported a revenue decline to $7 billion in 2024, down from $8.2 billion in the previous year, due to market fluctuations and reduced demand in certain sectors. Despite these challenges, Onsemi is pursuing aggressive growth strategies, including a proposed $6.9 billion acquisition of Allegro MicroSystems. This acquisition aims to diversify its product portfolio and strengthen its position in the automotive and industrial markets. When contacted for comment, Onsemi’s representatives declined to provide specifics about its Indian ventures.

India’s Semiconductor Ambitions Gain Momentum

India’s push to become a semiconductor manufacturing hub has gained significant traction through the ISM, which has approved three major OSAT projects so far. These include a Rs 27,120 crore facility by the Tata Group in Assam, a Rs 7,584 crore unit by CG Power and Industrial Solutions, and a Rs 3,307 crore plant by Kaynes Technology India in Gujarat’s Sanand region. These projects underscore the government’s commitment to fostering a self-reliant semiconductor ecosystem through financial incentives and policy support.

OSAT facilities play a crucial role in semiconductor production by assembling, testing, and packaging silicon wafers into finished chips. By localizing these processes, India aims to reduce reliance on imports, lower production costs, and attract further investments from global semiconductor firms.

Infineon’s Global Dominance and Onsemi’s Strategic Shifts

Infineon continues to solidify its position as a global leader, reporting $15 billion in revenue for the 2024 fiscal year and employing approximately 58,000 people worldwide. Its focus on power management solutions, particularly for renewable energy and automotive systems, aligns with global trends toward electrification and sustainability.

Onsemi, meanwhile, is navigating a transformative phase. Beyond its acquisition plans, the company is streamlining operations to prioritize high-growth sectors such as electric vehicles, energy infrastructure, and advanced sensor technologies. The proposed Allegro MicroSystems acquisition reflects its ambition to integrate cutting-edge motor control and power management solutions, which could bolster its offerings in automotive electrification and industrial automation.

Conclusion

The potential entry of Infineon and Onsemi into India’s OSAT landscape highlights the country’s growing significance in the global semiconductor industry. For multinational corporations, partnerships with local firms offer a strategic pathway to leverage India’s cost-efficient manufacturing base, skilled engineering talent, and expanding domestic market.

As India’s semiconductor policy framework evolves, collaborations between global chipmakers and Indian entities could drive technological advancements, job creation, and supply chain resilience. While both Infineon and Onsemi remain cautious in their public statements, their exploratory discussions signal confidence in India’s potential to emerge as a pivotal player in the semiconductor value chain. The coming months may bring concrete developments as these firms align their strategies with India’s vision for semiconductor self-sufficiency.