Murugappa's chip testing plant to begin supplies next year, says JV partner
The CG Semi-Renesas semiconductor testing and assembly plant in Sanand, Gujarat will commence trial operations this year itself. Renesas is also opening two new chip design facilities this year, and plans to hire 300 semiconductor designers by end-2025.
The $9-billion Murugappa Group’s outsourced semiconductor assembly and testing (Osat) plant, approved in February last year in partnership with Japan’s Renesas Electronics, will commence supplying chips to paying clients by the first half of next year, according to a senior executive.
“The trial production, to be sure, will begin as early as the next few months itself," said Malini Narayanamoorthi, India head of Renesas. “We already have clients to serve out of the Osat, which will commence next year."
The Osat plant in Gujarat's Sanand, involving a net investment of around $222 million over five years, is majority owned by CG Semi, a wholly owned subsidiary of Chennai-based Murugappa Group. The factory was among the first to be approved to receive state and central government incentives under the India Semiconductor Mission’s first tranche. Renesas, with around 7% stake, plays the role of a technology partner—a mandate set by the Centre’s India Semiconductor Mission.
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Osat plants are third-party facilities that help chip manufacturers assemble and test processors, before they are ‘packaged’ into an integrated circuit and placed inside devices such as smartphones, personal computers, internet-enabled infrastructure and everything else that processes data in some form.
Three Osat facilities were approved by the ministry of electronics and IT (Meity) under India’s first set of semiconductor incentives. These are being built by Tata Electronics and Kaynes Technology, alongside the CG Semi-Renesas joint venture.
Renesas ups hiring, eyes new chip design hubs
“We operate as an entity of Renesas’ global operations. Joint ventures and partnerships are a part of our operations, but we do not intend to conduct a blanket joint venture strategy for all our operations," said Narayanamoorthi. “To bolster our position here, we plan to hire 300 people—mostly semiconductor designers—by the end of this year. We also plan to set up two new facilities—in Bengaluru and Hyderabad—also by the end of this year."
As part of the company’s initiatives, Renesas is designing a cutting-edge 3-nanometre semiconductor chip from India, the patent of which will have anchor customers that already work with Renesas—as well as any other venture commercially in future, she said.
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A 3-nanometre chip is currently the world’s most sophisticated semiconductor processor found in consumer electronics, such as Apple’s latest iPhones. Building sophisticated chips increases India’s value in the global chip ecosystem.
India’s chip design ambition gets 3nm push
Union IT minister Ashwini Vaishnaw, speaking at the inauguration of Renesas’ new engineering centre in Noida, said that this is “the first time that a 3nm chip is being designed in India".
“This showcases India’s potential to play a crucial role in the global semiconductor and electronics ecosystem, and reflects confidence among global firms to consider India as a high-potential geography for semiconductors," Vaishnaw said.
India is already a hub for semiconductor design. The country accounts for almost one-fifth of all semiconductor designers in the world, with companies such as US-based Intel, Advanced Micro Devices (AMD) and Applied Materials, among others, all housing chip designers in the country.
Vaishnaw said that Renesas’ development of chip design in India “will be owned by India." Owning patents and IPs in technology drives the highest amount of value in the semiconductor ecosystem. According to an estimate by consulting firm Deloitte in February, the semiconductor market around the world is set to be worth close to $700 billion by December.
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The chip design patents by the likes of Renesas in India can help India increase its local value addition—a factor that industry experts and analysts peg as the most crucial factor for the country’s push to become a $500-billion electronics ecosystem by 2030, said SD Sudarsan, executive director of Centre for Development of Advanced Computing (C-Dac), Bengaluru.
“When such patents are developed, India will have to buy fewer patents when it comes to building a chip and a full integrated circuit—that today works as a conjunction of multiple tech patents around the world," Sudarsan said. “This is a crucial part for India to make a bigger contribution to the global semiconductor space."
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