CG Power Joins Forces for Indian Chip Plant

Murugappa Group's entity, CG Power and Industrial, has recently entered into a strategic partnership with Renesas Electronics America and Stars Microelectronics (Thailand) to establish an outsourced semiconductor assembly and testing (OSAT) facility within India. This collaboration involves the signing of various agreements encompassing technology, services, manufacturing, and technical support.

The investment breakdown for this venture sees CG contributing USD 205 million, Renesas investing USD 15 million, and Stars allocating USD two million. Consequently, the equity distribution in the joint venture company will be approximately 92.34 percent for CG, 6.76 percent for Renesas, and 0.90 percent for Stars. The finalization of these investments is contingent upon meeting the stipulated conditions outlined in the agreements.

However, the establishment of this joint venture is contingent upon obtaining regulatory approvals, including consent from the Ministry of Electronics and Information Technology (MeitY) of the Government of India, as well as securing subsidies from both central and state governments. Upon completion, this initiative is expected to significantly contribute to the development of the Indian semiconductor ecosystem.

This move follows CG's previous announcement in November, where it expressed intentions to set up an OSAT unit with a proposed investment of around USD 791 million, spread over a five-year period. CG Power and Industrial, a part of the Murugappa Group, is known for its diversified product portfolio spanning across electrical, industrial, and consumer segments.

News by Rahul Yelligetti