CG Power Wants To Set Up Semiconductor Assembly, Test Unit; Seeks Approval. Stock Jumps 20%

CG Power and Industrial Solutions in its application said an investment of about $791 million would be done over a period of five years

CG Power and Industrial Solutions wants to set up an outsourced semiconductor assembly and test facility in India. The company on Wednesday filed an application stating that an investment of about $791 million would be done over a period of five years, according to a stock exchange filing. In the statement, CG Power and Industrial Solutions said that it moved an application to the Ministry of Electronics and Information Technology, seeking subsidies for the project.

"We wish to inform you that the Company today filed an application with Ministry of Electronics and Information Technology (MeitY), Government of India seeking approval to set up an Outsourced Semiconductor Assembly and Test (OSAT) facility and the grant of subsidy for the said project under the modified scheme for setting up of compound semiconductors/silicon photonics/sensors fab/discrete semiconductors fab and semiconductor assembly, testing, marking and packaging (ATMP) facilities in India," the company stated in the exchange filing.

Stocks of the company soared about 20 per cent to Rs 469, hitting 52-week high, following the announcement.

According to CG Power and Industrial Solutions, the funding for the project is expected to be funded by a combination of subsidy, joint venture (JV) partners' equity contribution, and debt, as required. Talks on the issue is underway, the company said.

Meanwhile, in September this year, Micron, the US-based semiconductor maker, started constructing its $2.75 billion semiconductor testing and assembly unit at Sanand in Gujarat. Micron has asked Tata Projects to build its advanced semiconductor assembly and test factory, the media has reported. Micron has conducted a ‘ground-breaking ceremony’ in Gujarat and will invest $825 million over a period of seven years in the state.

India's Semiconductor Mission, launched in 2021, saw a number of firms and joint ventures expressing their intention to set up chip assembly and fabrication units in the country.