HomeTechnology NewsExclusive | Cholamandalam Investment chairman Vellayan Subbiah optimistic about India's semiconductor industry growth
Exclusive | Cholamandalam Investment chairman Vellayan Subbiah optimistic about India's semiconductor industry growth
Vellayan Subbiah, Chairman of Cholamandalam Investment, expressed optimism about India's semiconductor industry. The company, in a joint venture with Renesas and Stars Microelectronics, plans to invest ₹7,600 crore in an OSAT facility in Gujarat, operational by 2026.
Vellayan Subbiah, Chairman of Cholamandalam Investment, expressed strong optimism about the growth potential of India's semiconductor industry in an exclusive interview with CNBC-TV18. Subbiah, named EY Entrepreneur of the Year in 2023 and a contender for the title this year, highlighted the significant strides being made in the sector.
New joint venture for OSAT facility
Cholamandalam Group's CG Power and Industrial Solutions Ltd has entered into a strategic joint venture with Renesas Electronics Corporation and Stars Microelectronics, a Thailand-based Outsourced Semiconductor Assembly and Test (OSAT) provider. The JV, a key part of India's Semiconductor Mission, aims to establish and operate an OSAT facility in Sanand, Gujarat. The Union Cabinet approved the project on February 29, 2024, underscoring its strategic importance.
The joint venture will be predominantly owned by CG, which holds 92.3% of the equity. Renesas and Stars Microelectronics will have approximately 6.8% and 0.9%, respectively. The JV plans to invest ₹7,600 crore over the next five years, financed through subsidies, equity, and potential bank borrowings.
India's manufacturing potential
Subbiah reiterated his bullish stance on India's manufacturing story and potential, particularly in the semiconductor sector. "I think the semiconductor industry is really going to mushroom in India. I think there's a lot of potential for it," he said. He emphasised India's intellectual capacity, noting that nearly 20% of the world's design engineers are Indian. "Almost 20% of the world's design engineers are Indian. So I do feel like that sector has tremendous potential in India," Subbiah said.
In addition to the semiconductor venture, Subbiah hinted at exploring other "white spaces" or untapped opportunities in sectors such as electric mobility and medical consumables. He remains optimistic about India's ability to harness these opportunities for growth and innovation.
Establishing the OSAT facility in Gujarat marks a significant step forward in India's semiconductor mission, reflecting both governmental support and private sector enthusiasm for advancing the country's technological capabilities.
Also read: Zoho plans $700 million foray into chipmaking
New joint venture for OSAT facility
Cholamandalam Group's CG Power and Industrial Solutions Ltd has entered into a strategic joint venture with Renesas Electronics Corporation and Stars Microelectronics, a Thailand-based Outsourced Semiconductor Assembly and Test (OSAT) provider. The JV, a key part of India's Semiconductor Mission, aims to establish and operate an OSAT facility in Sanand, Gujarat. The Union Cabinet approved the project on February 29, 2024, underscoring its strategic importance.
The joint venture will be predominantly owned by CG, which holds 92.3% of the equity. Renesas and Stars Microelectronics will have approximately 6.8% and 0.9%, respectively. The JV plans to invest ₹7,600 crore over the next five years, financed through subsidies, equity, and potential bank borrowings.
Subbiah praised the government's swift approval process, a testament to the project's viability, and confirmed that the design and construction of the factory in Gujarat have commenced. "The government has been remarkably fast with all of its approvals. We've just started the design and building of the factory in Gujarat," he stated. Given the complexity of building such factories, he anticipates that operations at the facility could begin by 2026. "Maybe by 2026 we can start operations at that factory," Subbiah added. Over 50% of the senior-level team has already been recruited, and efforts are underway to finalise the design and build stages.
India's manufacturing potential
Subbiah reiterated his bullish stance on India's manufacturing story and potential, particularly in the semiconductor sector. "I think the semiconductor industry is really going to mushroom in India. I think there's a lot of potential for it," he said. He emphasised India's intellectual capacity, noting that nearly 20% of the world's design engineers are Indian. "Almost 20% of the world's design engineers are Indian. So I do feel like that sector has tremendous potential in India," Subbiah said.
In addition to the semiconductor venture, Subbiah hinted at exploring other "white spaces" or untapped opportunities in sectors such as electric mobility and medical consumables. He remains optimistic about India's ability to harness these opportunities for growth and innovation.
Establishing the OSAT facility in Gujarat marks a significant step forward in India's semiconductor mission, reflecting both governmental support and private sector enthusiasm for advancing the country's technological capabilities.
Also read: Zoho plans $700 million foray into chipmaking
(Edited by : SonalMohan Jadhav)
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