German and US companies, including Infineon and Onsemi, are seeking OSAT opportunities in India, indicated by Infineon’s partnership with CDIL Semiconductors and Onsemi’s plans for local collaboration. Revenue reports and restructuring challenges highlight the current landscape of the semiconductor industry, while experts suggest strategic prioritization in India’s semiconductor mission to ensure effective utilization and support.
German and US companies are increasingly exploring opportunities in India’s Outsourced Semiconductor Assembly and Test (OSAT) sector. Notable projects include the Tata Group’s Rs 27,120 crore facility in Assam, CG Power’s Rs 7,584 crore unit, and Kaynes Technology India’s Rs 3,307 crore initiative in Sanand, Gujarat.
Infineon has expressed interest in establishing an OSAT presence in India, having recently signed a collaboration with CDIL Semiconductors for the supply of bare semiconductor wafers. This partnership is perceived as a significant step toward enhancing their operations in the country. Infineon intends to leverage its expertise not only in power semiconductors but also in the automotive sector and beyond. As reported, “Currently, Infineon has no plans for its own manufacturing activities in the country.”
Arizona-based Onsemi is also evaluating its prospects in the Indian market, aiming to establish an OSAT presence. Their strategy involves partnering with local firms, leveraging their brand, and using local resources to develop facilities while providing technical expertise. A representative from Onsemi noted that they did not have any specific updates to share at this moment.
Infineon, one of the largest semiconductor manufacturers in Germany, reported revenues of approximately $15 billion for the fiscal year ending September 30, 2024. The company emphasizes the growing demand for semiconductors. They state, “Even if the market as a whole is currently rather weak, we need to take steps today to ensure that we have the competitive manufacturing capacity required for the medium and long term.”
Onsemi is experiencing challenges and has announced layoffs of around 2,400 employees amidst restructuring efforts. With a revenue drop reported from $8.2 billion in 2023 to $7 billion, Onsemi recently made an acquisition bid for chip developer Allegro MicroSystems valued at $6.9 billion to diversify revenue streams.
Experts assert that India’s semiconductor mission (ISM) must adopt data-driven decisions regarding the number of subsidized OSAT facilities. The initial phase granted a 50% subsidy on capital expenditure for OSAT units, with additional incentives from some states. Analyst Arun Mampazhy highlights the importance of assessing whether this level of support will extend to future OSAT approvals and emphasizes the need to prioritize commercial silicon and compound semiconductor fabs in the upcoming ISM phase over OSAT units.
The burgeoning interest of German and US firms in India’s OSAT sector underscores the country’s potential as a hub for semiconductor manufacturing. Infineon and Onsemi’s initiatives reflect the strategic partnerships that could lead to a more robust semiconductor ecosystem in India. However, experts recommend a careful and strategic approach to ensure sustainability and optimal utilization of resources within the industry. The focus on data-driven decisions and prioritization of critical facilities will be paramount to achieving long-term success in this sector.
Original Source: m.economictimes.com
