CG Power and Industrial Solutions Ltd announced on Wednesday that it has applied to the Ministry of Electronics and Information Technology (MeitY) for permission to establish an outsourced semiconductor assembly and test (OSAT) facility.
According to a stock exchange filing, the estimated investment on the project over a five-year period is $791 million, which will be supported by a combination of subsidies, joint venture partners equity contribution, and debt, as required.
In response to the news, shares of CG Power and Industrial Solutions surged 20% in intraday trading to a 52-week high of $469.35 on the National Stock Exchange (NSE). Following the recent announcement, the company's market capitalisation increased to 71,683 crore. The stock has increased by 74% in the last year and by 73% in 2023.
The application also requests funding for the project under the modified scheme for establishing compound semiconductors, silicon photonics, sensors fab, discrete semiconductors fab, semiconductor assembly, testing, marking, and packaging (ATMP), and outsourced semiconductor assembly and test (OSAT) facilities in India.
"It may be further noted that, subject to the project and the subsidy being approved, the Company proposes to implement the same as a Joint Venture in partnership with technology providers/anchor customers, which are under discussion," the company's petition states.
In July, American chipmaker AMD announced a $400 million investment in India for the next five years. The projected investment would include AMD's new Bengaluru campus, which will be the world's largest R&D center. AMD will use these expenditures to foster semiconductor design innovation and to support the government's Semiconductor Mission.
Micron Technology, one of the world's leading semiconductor companies, has recently announced intentions to invest up to $825 million in a new assembly and testing plant in Gujarat. Sanjay Mehrotra, president and CEO of Micron, stated that the chipmaker's new assembly and testing facility in Gujarat will be the first in India. "We estimate that our project in Gujarat will create nearly 5,000 direct jobs plus an additional 15,000 jobs in the community over the coming years," Mehrotra stated at the time.
"The memory products we develop are essential components of any modern computing device." Many more memory storage packages will be required as computers become more prevalent and entwined in all parts of our everyday lives, and our India plant will help us fulfill the growing demand," he said. "We are hopeful that this investment will help catalyze other investments in the sector, strengthen indigenous manufacturing capability, encourage innovation and support job creation."