India's Chip Strategy Moves From Design Services to a Packaging Line

On 1 August 2026 the Prime Minister laid the foundation stone for ASIP Technologies' Rs 2,500 crore (about US$260 million) OSAT — outsourced semiconductor assembly and test — facility at Tarluvada, Visakhapatnam. It is South India's first unit approved under the India Semiconductor Mission.

The plant will package and test chips — not fabricate them — starting with wire-bond and flip-chip BGA and adding 2.5D/3D advanced packaging within two to three years, at a planned 96 million chips a year, with South Korea's APACT as technology partner.

India's semiconductor strength has been design services — the front end. Assembly, test and packaging is the back end where physical value and jobs sit, and where India has depended almost entirely on overseas lines. A domestic OSAT node narrows that gap for AI, high-performance-computing and data-centre parts.

OSAT is the most localisable layer of the chip stack — a Build-now surface in our dependency work. The line pulls a supplier chain behind it: leadframes, organic substrates, bonding wire, moulding compound, high-purity gases and test equipment, most still imported. The packaging plant is the anchor; the materials tail is the opportunity.