A 92-year-old electrical engineering company is now a chipmaker. CG Power and Industrial Solutions has moved from transformers and motors into semiconductor manufacturing through a joint venture with Japan’s Renesas Electronics, and the plant is already shipping product.
Who Is Involved in the CG Power-Renesas Joint Venture
The joint venture, known as CG Semi, brings together three companies. CG Power and Industrial Solutions, part of the Murugappa Group and Tube Investments of India, holds the majority stake. Renesas Electronics, a Japan-based semiconductor supplier with more than two decades of experience in automotive, industrial, and IoT chips, serves as the technology partner. Stars Microelectronics, a Thailand-based Outsourced Semiconductor Assembly and Test provider, rounds out the venture with its packaging expertise.
From Cabinet Approval to Commercial Production
The Union Cabinet approved the joint venture’s project under India’s Semiconductor Mission on February 29, 2024, shortly after the three companies signed their Joint Venture Agreement. Construction of the facility in Sanand, Gujarat followed, backed by a planned investment of ₹7,600 crore over five years.
By mid-2026, the project had moved from construction into commercial operation. Initial shipments began around June 19, 2026, and Prime Minister Narendra Modi formally inaugurated the facility on July 4, 2026.
What the Sanand Facility Actually Makes
CG Semi operates as an Outsourced Semiconductor Assembly and Test facility, commonly shortened to OSAT. The plant handles assembly, packaging, and testing of chips destined for consumer electronics, automotive systems, industrial applications, and power management, along with 5G-related components.
Product types range from legacy packages such as Quad Flat No-Lead and Quad Flat Package designs to more advanced formats including Flip Chip Ball Grid Array and Flip Chip Chip Scale Package.
Ownership and Investment Breakdown
CG Power holds approximately 92.3 percent of the joint venture, with Renesas holding around 6.8 percent and Stars Microelectronics around 0.9 percent. The total investment figure of ₹7,600 crore, roughly $900 million, is funded through a mix of government subsidies, equity, and bank borrowing.
Current Capacity and Long-Term Targets
At launch, the Sanand plant runs at a capacity of roughly 200 million chips per year, or approximately 500,000 chips per day, from its initial pilot production line. CG Power has stated a long-term ambition to scale that figure to 5 billion chips annually as the facility matures and adds production lines.
Earlier planning documents described an eventual target capacity of up to 15 million units per day once the facility is fully built out, underlining how much room for growth remains beyond the current pilot-stage output.
What This Means for CG Power’s Business
CG Power has traditionally operated in electrical equipment and engineering, split across industrial systems and power systems. Entering semiconductor manufacturing marks a genuine diversification for the company rather than an adjacent product extension.
Executive Vice Chairman Vellayan Subbiah confirmed that the company has already begun shipping chips from Sanand after receiving customer qualification approvals, while also calling for broader industry participation across chip design, wafer fabrication, and assembly and testing to build out India’s semiconductor ecosystem more fully.
Key Takeaways
- Partners: CG Power and Industrial Solutions, Renesas Electronics, and Stars Microelectronics.
- Approval date: Cabinet-approved on February 29, 2024, under India’s Semiconductor Mission.
- Investment: Roughly ₹7,600 crore, about $900 million, over five years.
- Ownership split: CG Power around 92.3 percent, Renesas around 6.8 percent, Stars Microelectronics around 0.9 percent.
- Facility type: An Outsourced Semiconductor Assembly and Test plant in Sanand, Gujarat.
- Current capacity: Around 200 million chips per year at launch, targeting 5 billion chips annually long term.
- Commercial launch: Initial shipments began in June 2026, with formal inauguration on July 4, 2026.
Frequently Asked Questions
What does the CG Power-Renesas joint venture actually manufacture?
It runs an assembly, packaging, and testing plant for chips used in consumer electronics, automotive, industrial, and power management applications.
Who owns the largest share of CG Semi?
CG Power and Industrial Solutions holds the majority stake at approximately 92.3 percent.
When did CG Semi start commercial production?
Initial shipments began around June 19, 2026, with the facility formally inaugurated on July 4, 2026.
How much chip capacity does the Sanand plant currently have?
The facility currently produces around 200 million chips per year, with a long-term target of 5 billion chips annually.
Where is the CG Power-Renesas facility located?
The plant is located in Sanand, Gujarat, alongside other semiconductor facilities from Micron and Kaynes Semicon.
Conclusion
The CG Power and Renesas joint venture has moved from a 2024 Cabinet approval to an operating semiconductor plant shipping real chips in just over two years. With current output around 200 million chips annually and a long-term goal of 5 billion, CG Semi represents one of the clearer success stories among India’s early OSAT projects, and a genuine shift in identity for a company once known purely for electrical equipment.
