Emerging Opportunities for OSAT Development in India: A Focus on Infineon and Onsemi

German and US companies, including Infineon and Onsemi, are exploring OSAT opportunities in India, seeking partnerships to strengthen market presence. Infineon’s collaboration with CDIL Semiconductors marks a strategic move towards establishing OSAT facilities. Experts suggest careful planning within the Indian semiconductor mission to prioritize key investments and ensure clarity on incentives for OSAT development.

Recent developments in the semiconductor industry highlight German and US companies, particularly Infineon and Onsemi, exploring opportunities in India’s Outsourced Semiconductor Assembly and Test (OSAT) sector. Key projects include Tata Group’s Rs 27,120 crore facility in Assam and other significant investments such as CG Power’s Rs 7,584 crore unit and Kaynes Technology’s Rs 3,307 crore facility in Gujarat. Infineon is reportedly contemplating establishing an OSAT presence in India, following a partnership with CDIL Semiconductors to supply bare semiconductor wafers, signaling potential growth in India’s semiconductor capabilities.

Onsemi, based in Arizona, is also looking to enter India’s OSAT market. The company aims to collaborate with local partners to leverage its brand and technical expertise while allowing Indian firms to fund the venture. This strategy presents mutual benefits as the companies strengthen their operational capabilities in India. However, Onsemi’s representative noted that there are no details available about their plans at this moment.

Infineon, a major player in the semiconductor sector, reported approximately $15 billion in revenue for the 2024 fiscal year, emphasizing the continuous demand for semiconductors despite current market fluctuations. They are strategically planning to increase their manufacturing capacity to remain competitive in the long term. In contrast, Onsemi is facing challenges, including a restructuring that resulted in the layoff of about 2,400 employees, alongside a revenue decline from $8.2 billion in 2023 to $7 billion.

Industry experts underscore the necessity for the Indian semiconductor mission (ISM) to base decisions on data regarding funding for OSAT facilities. The fiscal support comprising 50% of capital expenditure granted to OSAT units needs careful evaluation. Analysts emphasize the vital need for clarity on continued incentives and suggest prioritizing high-volume silicon fabs over OSATs in the ISM’s subsequent phase. Encouraging companies like Infineon to focus on such advanced projects could significantly boost India’s semiconductor landscape.

In summary, the potential involvement of German and US semiconductor firms in India’s OSAT sector represents a significant step towards enhancing domestic capabilities. Infineon’s strategic partnerships and Onsemi’s interest in collaboration underscore the opportunities within this market. However, decisions related to the Indian semiconductor mission must be informed and discerning, prioritizing essential investments in critical semiconductor technologies to ensure sustainable growth.

Original Source: m.economictimes.com