
Shares of CG Power and Industrial Solutions Ltd (CG Power) will be in focus on Friday morning after the company said its joint venture (JV) with Renesas Electronics Corporation of Japan and Stars Microelectronics of Thailand, would set up a semiconductor unit in Sanand, Gujarat.
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the project of the JV under India’s Semiconductor scheme on February 29. The unit will be set up with an investment of Rs 7,600 crore. Renesas is a semiconductor company focussed on specialised chips. It operates 12 semiconductor facilities and is an important player in microcontrollers, analog, power, and System on Chip (‘SoC)’ products.
The CG Power semiconductor unit will manufacture chips for consumer, industrial, automotive and power applications. It would have a capacity of 15 million per day.
The JV will be 92.3 per cent owned by CG Power, with Renesas and Stars Microelectronics each
holding equity capital of approximately 6.8 per cent and 0.9 per cent, 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 state-of-the-art 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," CG Power said.
S. Vellayan, Chairman, CG Power and Industrial Solutions Limited, said, CG’s entry into the semiconductor manufacturing marks a strategic diversification.
"Our partners, Renesas and Stars Microelectronics, will make our learning curves steeper and help us focus on innovation and excellence," he said.