Rising Interest from German and US Firms in India’s Semiconductor OSAT Sector
German and US companies, including Infineon and Onsemi, are exploring opportunities within India’s semiconductor OSAT sector, indicating strong growth potential. Recent partnerships signal advances towards establishing OSAT facilities. Experts suggest focusing on comprehensive strategies to enhance India’s semiconductor manufacturing capacity beyond just OSATs.
Recent developments signify emerging interest from German and US companies in India’s Outsourced Semiconductor Assembly and Test (OSAT) sector. Notably, several prominent facilities are being established, including the Tata Group’s Rs 27,120 crore plant in Assam and CG Power’s Rs 7,584 crore unit. Both Infineon and Onsemi are exploring opportunities within this expanding market, creating potential for significant technological partnerships.
Infineon, a leading German semiconductor manufacturer, has recently established a cooperation with CDIL Semiconductors located in Mohali for supplying bare semiconductor wafers. This collaboration may signal Infineon’s intentions to establish an OSAT presence in India. Moreover, the company is keen on utilizing its expertise in power semiconductor technology to broaden its ventures into additional sectors such as automotive.
Onsemi, previously known as ON Semiconductor Corporation based in Arizona, is also targeting an OSAT presence in India. The company plans to leverage its established brand while seeking local partnerships that would finance the construction of the facility. Onsemi sees this collaborative approach as mutually beneficial, allowing them to share their technical expertise.
Currently, Infineon is focused on maintaining flexibility regarding future projects, indicating that they are evaluating global partnerships but have no immediate plans for local manufacturing in India. Nevertheless, they have acknowledged the growing demand for semiconductors despite a currently weak market.
Industry experts suggest that the Indian Semiconductor Mission (ISM) should carefully consider data-driven decisions pertaining to the establishment of OSAT facilities. In its initial phase, ISM provided 50% financial support for OSAT capital expenditures. However, industry analysts have raised questions about the sustainability of these incentives and the reliance on imported processed wafers.
They advocate for a strategic approach in prioritizing the construction of commercial silicon fabs and compound semiconductor fabs over additional OSATs in the next phase of the ISM policy. Experts stress that companies like Infineon should receive encouragement towards developing substantial manufacturing capacities locally instead of solely focusing on OSAT expansions.
The burgeoning interest of German and US companies in India’s OSAT sector reflects favorable conditions for semiconductor manufacturing in the region. Companies like Infineon and Onsemi are exploring partnerships to leverage their strengths while contributing to India’s burgeoning semiconductor landscape. However, it is critical for policymakers to prioritize strategic developments, ensuring that financial incentives for OSAT facilities align with the broader goals of supporting a diverse semiconductor ecosystem in India.
Original Source: m.economictimes.com
