Chennai: Chennai-based Murugappa Group recently revealed plans to enter semiconductor assembly and testing, committing a $791 million investment over the next five years. Following this announcement, CG Power, a company set up by Crompton Greaves, saw their shares go through a surge of 20%, reaching ₹469.
The ₹7,000-crore company has applied for subsidies from the Union Ministry of Electronics and Information Technology for an ‘outsourced semiconductor assembly and testing’ (OSAT) facility in India.
Funding for the project will come from a mix of subsidies, joint venture partnerships, equity contributions, and debt, with discussions underway for collaboration with technology providers.
Semiconductors serve as foundational components in various electronic devices ranging from smartphones to passenger cars, cloud servers, infrastructure, defence systems and industrial automation. The global OSAT market is expected to reach $76.23 billion by 2028.
The Indian semiconductor market, valued at $15 billion in 2020, is projected to grow to $63 billion by 2026. According to industry reports, OSAT has a crucial role in the expansion of the semiconductor industry.
The Murugappa Group, a ₹75,000-crore conglomerate, traditionally involved in tubes, cycles, fertilisers, chemicals, sugar, abrasives, and financial services, has recently diversified into emerging opportunities.
The group’s shift towards new sectors includes investments in e-mobility, phase-changing chemicals, drones, mobile phone cameras, and online payment gateway services. Now, the conglomerate has set its focus on semiconductors.
This expansion aligns with the Semicon India program, where the government earmarked ₹76,000 crore to support companies venturing into semiconductors, offering “fiscal support of 50 per cent of capital expenditure” for OSAT projects.
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