Emerging Semiconductor Opportunities: German and US Companies Eye…

German and US companies, including Infineon and Onsemi, are exploring OSAT opportunities in India, supported by significant investments in local semiconductor facilities. Despite current market vulnerabilities, strategic partnerships and effective planning are seen as vital for future growth in the Indian semiconductor landscape.

Recent developments indicate that both German and US companies are actively exploring the potential of Outsourced Semiconductor Assembly and Test (OSAT) opportunities in India. Notable projects include the Tata Group’s Rs 27,120 crore facility in Assam, CG Power’s Rs 7,584 crore unit, and Kaynes Technology India’s Rs 3,307 crore project in Gujarat. Infineon, a major German semiconductor company, is reportedly considering establishing an OSAT presence in India after signing an agreement with Mohali-based CDIL Semiconductors for the supply of semiconductor wafers.

The partnership between Infineon and CDIL may signal further investments in OSAT capabilities within India. An industry expert indicated that Infineon, recognized for its leadership in power semiconductors, may ultimately expand its expertise into the automotive and other sectors, possibly fostering additional partnerships in the process. However, a spokesperson from Infineon clarified, “On a regular basis, we evaluate potential partnerships across the globe. However, we can’t elaborate on potential future projects at this point. Currently, Infineon has no plans for its own manufacturing activities in the country.”

Similarly, Onsemi, formerly known as ON Semiconductor Corporation, is now eyeing opportunities in India’s semiconductor landscape. An informed source commented, “Onsemi is very keen on an OSAT presence in India. They see it as a way to leverage their brand name and have the Indian partner put in the money for the facility while they provide technical expertise.” Although Onsemi has not yet disclosed detailed plans, they appear committed to exploring this market further.

Infineon, recognized as one of Germany’s leading semiconductor firms, reported revenues of approximately $15 billion for the fiscal year ending September 30, 2024, employing around 58,000 global staff. The company acknowledged growing structural demand for semiconductors, emphasizing the need to build competitive manufacturing capabilities for the future despite current market weaknesses. Conversely, Onsemi is navigating financial challenges, including recent workforce reductions and a significant decrease in annual revenue from $8.2 billion to $7 billion.

Industry experts advocate for a data-driven approach in the Indian semiconductor mission, recommending controlled subsidies for OSAT facilities. They express concerns regarding the reliance on imported processed wafers, suggesting a need for clarity on subsidy structures moving forward. Additionally, it is proposed that priority should be given to establishing high-volume silicon fabrication plants over OSAT units in the next phase of the ISM policy, encouraging companies like Infineon to focus on direct manufacturing capabilities instead.

In summary, both Infineon and Onsemi are actively evaluating potential opportunities in India’s semiconductor ecosystem with a particular focus on OSAT facilities. While Infineon’s collaborative efforts suggest a strategic approach to penetrate the Indian market, Onsemi seeks to leverage partnerships for resource allocation. As India progresses in its semiconductor mission, industry experts urge careful planning and prioritization to enhance manufacturing capabilities effectively.

Original Source: m.economictimes.com