India’s ATMP/OSAT Surge: Micron & Tata Lead Semiconductor Ecosystem Growth

India’s semiconductor growth strategy is increasingly focused on bolstering the back-end of the value chain—Assembly, Testing, Marking & Packaging (ATMP), also known as OSAT. Under the ISM, major projects have been approved and are now entering critical stages of development.

Micron’s Sanand ATMP Facility: A $2.75 billion investment, situated in Sanand, Gujarat, Micron’s plant is designed to serve both export and domestic markets. Phase 1 features about 500,000 square feet of cleanroom space. According to multiple reports, this phase is nearing cleanroom validation, with hopes of beginning operations in H2 2025. However, some original timeline expectations—late 2024 for Phase 1—have slipped.

Tata’s Jagiroad (Morigaon), Assam Plant: A greenfield ATMP unit costing ₹27,000 crore approved on February 29, 2024. It aims to produce up to 48 million chips per day using indigenous technologies, especially through advanced packaging techniques like flip chip and ISIP. The project includes 15,000 direct and 11,000–13,000 indirect jobs, and is expected to be operational by mid-to-late 2025, with continuing reviews indicating functionality by 2026.

Other Key Facilities: Several complementary projects are in motion. These include:

• HCL-Foxconn JV’s OSAT near Jewar, Uttar Pradesh (₹3,706 crore), approved as the sixth ISM unit, producing display driver chips, expected operational in 2027, with capacity ~36 million units/month.
• Kaynes Semicon’s OSAT facility in Sanand, Gujarat, with ₹3,307 crore investment and capacity exceeding 6 million chips/day.
• CG Power & Renesas/Stars Microelectronics unit in Sanand (₹7,600+ crore) targeting ~15 million chip units/day.
• Specialised units like 3D Glass Solutions (advanced packaging & glass interposers) in Odisha, and SicSem (SiC-based compound semis fab plus packaging) targeting automotive, defense and high-performance markets.

Strategic Implications:

• India is positioning itself to capture back-end semiconductor market share, leveraging lower labor costs, state-led incentives, and geographic diversity to attract OSAT/ATMP investments.
• By focusing on packaging and testing, India can shorten its supply chain vulnerabilities, especially those exposed during recent chip shortages. However, without proportional development of front-end fabs (especially at advanced nodes), full value capture remains limited.
• Workforce scale-up and tech spillovers will be crucial: achieving cleanroom certifications, sourcing specialized inputs, and enabling advanced packaging technologies (e.g., SiP, ISIP, 3D HI) will determine competitiveness.
• Timeline risks persist: delays in facility readiness, validation, and operational startup may affect fulfillment of both domestic demand and export commitments.

Open Questions:

• How will India ensure a reliable supply of raw materials (e.g. substrates, specialty gases), tooling, and inputs for ATMP facilities so as not to recreate dependencies?
• What are India’s plans for investing in front-end fabs at mature and advanced nodes to complement ATMP buildup?
• How sustainable are the incentives from both central and state governments in maintaining profitability for investors once subsidy periods lapse?
• What quality and reliability benchmarks will these new facilities need to meet to compete globally, especially technology-wise and in export markets?