India's OSAT Revolution: A Long-time Coming
Outsourced semiconductor assembly and testing (OSAT) facilities are popping up on the news quite frequently in recent times. The Ministry of Electronics and Information Technology of India (MeitY) has approved, till publishing date, 8 packaging facilities. Heavyweights like Micron, HCL, Foxconn, and domestic companies like Continental Devices India Ltd. (CDIL) have invested a lot of money on these up and coming manufacturing plants. What are these facilities and what do they do? Let us dive into this question and come up with some answers.
Semiconductor fabrication has two main fabrication areas; namely the front-end and the back-end. The frontend deals with manufacturing the circuits on the wafer. The processes that are covered here are: deposition, lithography, etching, chemical-mechanical polishing, and doping. The wafer remains intact in this stage and will be sent for packaging. This is where an assembly, testing, marking and packaging (ATMP) facility comes into play. A brief summary would be that the wafers are diced into individual dies and then every die is checked individually. Very thin wires are used to connect the metal contact on the dies to the contacts on the packaging which will connect the device to the overall circuit. The entire device is encased in a protective covering, it packs the device in a box, hence the name. Repeated testing takes place through this entire period to make sure the device is healthy and functioning according to specified parameters. If the device meets specifications, it is laser marked with its name and manufacturer. The entire process is automated till the testing stage where some manual work is done including inserting and removing the dies from the testing machines. The final step is to sell it off. This entire process is as crucial as the front-end fabrication since any mistake can cause quite a loss.
An OSAT is an ATMP facility which provides contractual packaging services. OSAT can be viewed as a business model rather than an engineering term.
I mentioned Micron earlier, they have not made an OSAT facility in Sanand in Gujarat, it is an ATMP facility. Micron will manufacture their own NAND, and DRAM wafers in their foundries located in Taiwan, USA, and Japan. The wafers will be imported into India for backend manufacturing. They are using the facility for themselves; it is not open for contractual services. Kaynes Semicon has opened an OSAT facility in the same city of Sanand on 31 March, 2026. They have taken a contract from Alpha and Omega Semiconductor, a company specializing in power semiconductor devices. This is the difference in an OSAT, and a regular company run ATMP facility. Kaynes does not have a front-end line, it takes contracts for back-end fabrication work.
Why do I call it a revolution? This is because there was a time, not long ago, where the mention of this sort of facility would invite puzzling looks from the average person. Before the India Semiconductor Mission, a great initiative to increase awareness and interest surrounding manufacturing in India, there were only two facilities focussing solely on semiconductors. The first facility was made by Continental Devices India Limited (CDIL) in collaboration with Continental Device Corp., located in California, USA. In 1964, they made the first semiconductor packaging plant in Faridabad, Haryana (Delhi NCR). At one point, they worked as an end-to-end facility; front-end and back-end fabrication happened in one location till 2008. It was used for discrete semiconductor devices like diodes, bipolar junction transistors (BJTs), metal oxide semiconductor field effect transistors (MOSFETs) type of devices. They have since shifted operations to Delhi and Mohali, and turned their focus to a packaging-only approach. They have been given approval to expand their facilities in Mohali. Mohali, surprisingly, has quite a rich history in this domain.
This went on without competition till 1983, where in a bid to establish a foothold in semiconductors, the then prime minister Indira Gandhi had approved the construction of Semiconductor Complex Limited (SCL). This government run facility is situated in S.A.S Nagar, Mohali and has been renamed Semiconductor Laboratory. It was, and still is, primarily used by Indian Space Research Organisation (ISRO). The famous Vikram processor used in Chandrayaan 3 was developed and fabricated here. It is an end-to-end facility. This seems like a giant step in the right direction for the growth of this industry in India but back then it was anything but. On February 7, 1989, a mysterious fire broke out in the facility. The facility was cutting edge for its time, and it all burnt down leaving just the foundation there, a grim reminder of what happened. It was akin to stabbing a child, the dreams to establish dominance burned down with the facility. It took 33 years for the industry to start gaining momentum again.
Science waits for no one. The days of solo or duo discoveries like Isaac Newton's laws or Marie Curie and Pierre Curie identifying Polonium and Radium are long gone. Research groups consisting of huge teams spanning multiple continents is the norm now. Technology has moved at such a pace that if you don't keep up for one week, then you are lagging badly. SCL reopened in 1997 and found itself at a huge disadvantage. The child had not grown up while its competitors were full adults by now. Radio silence followed for the next 25 years which allowed USA, China, Japan, Germany, Malaysia, and Taiwan to produce the devices used by the majority of the world's population.
In 2022, the India Semiconductor Mission (ISM) was announced. It was backed by a budget of 76,000 crore (760 billion) INR. Companies, domestic and international, took notice. Micron was the first company to announce its venture into India, gaining approval from ISM in 2023. Its inauguration was on February 28, 2026. It was followed by Tata Assembly and Test plant approved in 2024. It is being constructed in Assam. Gujarat is turning into a semiconductor powerhouse with the approval of the construction of CG Power and Industrial Solutions' (CG Semi) facility in Sanand. Kaynes Semicon was mentioned earlier, they received their approval around the same time period. SiCSem, 3D Glass Solutions, and Advanced System in Package Technologies received approvals in 2025. SiCSem will work on silicon carbide transistor fabrication, it will be an end-to-end facility. The other two will focus on advanced packaging solutions for cutting edge devices.
Technology will continue to evolve in a "blink and you miss" speed. A few years ago everyone was using bulky cell phones with removable batteries and an external keyboard. Now, you will be hard-pressed in finding anyone who owns anything but a smartphone. The internet allowed researchers to share their findings online, air travel becoming cheaper made sharing knowledge across borders a cakewalk. If India has any hope in establishing herself as a manufacturing hub with a focus on research and development, she will need to be just as quick, which she has not been up until now.
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