Emerging Opportunities: German and US Companies Target India’s OSAT Sector

0
08dccda1-a4f1-4d90-94de-71e67ca6e964

German and US companies are exploring investments in India’s semiconductor sector, particularly in OSAT. Infineon and Onsemi are actively seeking local partnerships to strengthen their presence. Industry experts highlight the need for strategic decisions on facility subsidies under the Indian Semiconductor Mission for a sustainable market approach.

Recent developments reveal that German and US corporations are considering opportunities in the Outsourced Semiconductor Assembly and Test (OSAT) sector in India. This includes significant investments such as the Tata Group’s Rs 27,120 crore facility in Assam, CG Power’s Rs 7,584 crore facility, and Kaynes Technology’s Rs 3,307 crore project in Gujarat’s Sanand, indicating a strong interest in India’s semiconductor landscape.

Infineon, a major player in the semiconductor industry, is reportedly examining the potential for establishing an OSAT presence in India. An agreement was recently established between Infineon’s Asia-Pacific division and Mohali-based CDIL Semiconductors for supplying bare semiconductor wafers, reinforcing strategic ties that could lead to OSAT establishment in India.

The representative remarked on Infineon’s future plans, indicating, “On a regular basis, we evaluate potential partnerships across the globe. However, we can’t elaborate on potential future projects at this point. Currently, Infineon has no plans for its own manufacturing activities in the country.” This suggests a cautious approach while maintaining the potential for growth in partnerships.

Additionally, Onsemi, previously known as ON Semiconductor Corporation, is also showing interest in the Indian OSAT market. Sources suggest that Onsemi is keen to leverage its brand by partnering with Indian firms to fund OSAT facilities while providing the necessary technical expertise, which presents a mutually beneficial arrangement.

Despite Onsemi’s interest, the company is currently restructuring and has announced layoffs affecting approximately 2,400 employees globally. This indicates a turbulent phase for the company as it reported a decrease in annual revenue, falling from $8.2 billion in 2023 to $7 billion recently. In light of this, Onsemi made a substantial bid to acquire Allegro MicroSystems for $6.9 billion to diversify its revenue sources.

Experts in the semiconductor industry advise that the Indian Semiconductor Mission (ISM) should adopt a data-driven approach regarding the number of OSAT facilities to subsidize, with an emphasis on understanding the dependencies on imported processed wafers until 2030. Industry analyst Arun Mampazhy stresses the importance of clarity regarding the incentives structure for new OSAT proposals as well as prioritizing the establishment of high-volume silicon and compound semiconductor fabs in India’s second phase of the ISM policy.

In summary, major companies including Infineon and Onsemi are increasingly turning their attention to the Indian OSAT market, presenting new opportunities for growth in India’s semiconductor industry. While partnerships are being formed, particularly with local firms, the challenges associated with current restructuring and market dynamics necessitate careful navigation. Moreover, strategic planning by the Indian government, through the ISM, will be essential in determining the future landscape of semiconductor facilities in the country.

Original Source: m.economictimes.com

Leave a Reply

Your email address will not be published. Required fields are marked *