By
14 min ago 3 min read
An advanced semiconductor packaging and testing facility to be built in Visakhapatnam, Andhra Pradesh, is part of India’s drive to address what has been described as a critical gap in the country’s semiconductor value chain.
A ceremony last week saw project developer ASIP Technologies break ground on the ₹2,500 crore ($260m) Outsourced Semiconductor Assembly and Test (OSAT) facility, which is expected to package and test up to 96 million semiconductor devices annually.
The project is South India’s first semiconductor assembly and test facility approved under the India Semiconductor Mission (ISM) – a $13.2bn (₹1.26 lakh crore) initiative aimed at strengthening the country’s domestic semiconductor industry.
The 30-acre facility is being developed with an initial investment of more than ₹460 crore ($48.2m) in partnership with South Korean technology company APACT.
Once operational, the facility will provide semiconductor assembly, packaging and testing services rather than fabricate semiconductor wafers, helping address a key gap in India’s chip supply chain.
While India has become a major hub for semiconductor design, it has had limited domestic capability to package and test chips, with much of that work performed overseas.
Packaging and testing account for an estimated 30% to 40% of a semiconductor’s manufacturing cost. The new facility could cut costs considerably by shifting to domestic packaging and testing processes.
The facility is also expected to support growing demand for industrial and electronic specialty gases used in semiconductor assembly, packaging and testing processes.
According to ASIP, the facility will initially support wire-bond and flip-chip ball grid array (BGA) packaging before introducing advanced 2.5D and 3D packaging capabilities within two to three years.
It will serve high-growth sectors such as AI, high-performance computing, data centres, and high-speed communications. ASIP also plans to spend an extra ₹2,000 crore ($209m) to scale up packaging operations.
“The semiconductor industry is increasingly looking for resilient and diversified supply chains,” said Seong Dong Lee, CEO and President of APACT.
“We believe this facility will become an important part of India’s Semiconductor Mission and the global semiconductor ecosystem, providing advanced packaging and testing solutions to customers globally.”
Earlier this year, India’s Union Cabinet approved an investment of ₹3,936 crore ($417m) in in Gujarat through the ISM.
As of early July, the ISM had approved 12 projects worth approximately ₹1.64 lakh crore ($17.4bn).
In February, US memory chipmaker Micron launched operations at its $2.75bn semiconductor assembly and test facility at Sanand Industrial Park near Ahmedabad, Gujarat.
The site receives ultra-high-purity specialty and bulk gases via a dedicated electronic specialty gas hub developed by INOX Air Products at Dholera.
