CG Power and Industrial Solutions jumped 6.47% to Rs 472.55 after the company announced that it will jointly build an outsourced semiconductor assembly and test (OSAT) facility with Renesas and Stars Microelectronics in India.
CG Power, Renesas Electronics Corporation and Stars Microelectronics (Thailand) Public Co. have signed a joint venture agreement (JVA) to establish a joint venture (JV) to build and operate an OSAT facility in India.
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the project of the JV under Indias Semiconductor scheme on 29 February 2024.
CG, with around 86 years of manufacturing expertise, is keen to build semiconductor capabilities and ecosystem in India.
Renesas, a leading semiconductor company headquartered in Japan, will provide advanced semiconductor technology and expertise.
Stars Microelectronics, a Thailand-based OSAT, will provide both technology for legacy packages and training and enablement.
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The JV will be 92.3% owned by CG, with Renesas and Stars Microelectronics each holding equity capital of approximately 6.8% and 0.9%, respectively. The JV plans to invest INR 7,600 crores over a five-year period, which will be financed through a mix of subsidies, equity, and potential bank borrowings as required.
The JV will set up a manufacturing facility in Sanand, Gujarat, with a capacity that will ramp up to 15 million units per day. The JV will manufacture a wide range of products ranging from legacy packages such as QFN and QFP to advanced packages such as FC BGA, and FC CSP. The JV will cater to industries such as automotive, consumer, industrial, 5G, to name a few.
S. Vellayan, chairman, CG Power and Industrial Solutions, said, CGs entry into the semiconductor manufacturing marks a strategic diversification for us.
Our partners, Renesas and Stars Microelectronics, will make our learning curves steeper and help us focus on innovation and excellence.
CG Power & Industrial Solutions is an engineering conglomerate with an impressive and diverse portfolio of products, solutions and services for Power and Industrial equipment and solutions, addressing myriad needs.
The company's consolidated net profit surged to Rs 747.50 crore in the quarter ended December 2023 as against Rs 227.76 crore during the previous quarter ended December 2022. Sales rose 12.91% to Rs 1978.75 crore in Q3 FY24 over Q3 FY23.
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