India Launches First South Indian OSAT Chip Plant in Visakhapatnam

Prime Minister Narendra Modi has virtually laid the foundation stone for ASIP Technologies' new semiconductor Outsourced Semiconductor Assembly and Test (OSAT) facility in Tarluvada, Visakhapatnam. The project marks a significant expansion of the India Semiconductor Mission, establishing the first OSAT plant in both Andhra Pradesh and South India.

Developed in collaboration with South Korea-based technology partner APACT Co., the facility represents a total investment of ₹2,500 crore, with an initial capital injection exceeding ₹460 crore. Once operational, the plant is expected to produce 96 million chips annually. The project is projected to generate over 2,600 jobs, including 1,000 direct high-skilled positions and 1,600 indirect roles. To support this workforce, the project includes an in-house semiconductor training center with planned partnerships with IIT-Tirupati and IIT-Hyderabad.

Strategic Shift to South India

This development is part of a broader national strategy to reduce India's heavy reliance on imported semiconductors. While previous major approvals under the India Semiconductor Mission focused heavily on Gujarat—including projects by the Tata Group and CG Power—the Visakhapatnam plant signals a strategic push to diversify the semiconductor ecosystem. By establishing a hub in South India, the government aims to leverage the region's existing IT talent pool and infrastructure to accelerate domestic production capabilities.

Economic and Strategic Impact

Localizing the OSAT stage of manufacturing is critical because packaging and testing typically account for 30% to 40% of a chip's total manufacturing cost. By bringing these processes onshore, India can significantly lower the cost of domestic electronics and reduce vulnerability to global supply chain disruptions. This capability is particularly vital for the growth of high-performance computing, artificial intelligence, and data centers—sectors that are increasingly viewed as essential for national security and long-term economic growth.

Future Outlook

As the facility moves toward completion, the focus will shift to the integration of the planned training partnerships with the IITs to ensure a steady pipeline of specialized engineers. While the core infrastructure is now underway, the industry will be watching for the scale of subsequent investments and the speed at which the facility reaches its annual production target of 96 million chips. The success of this South Indian hub may determine the pace of further semiconductor investments across the region.