"We are very keen to establish India’s semiconductor ecosystem and plan to build a world-class OSAT (outsourced semiconductor assembly and testing) facility at Sanand. We intend to commence production in the next 2.5 to 3 years," S. Vellayan, Chairman of CG Power and Industrial Solutions Ltd, the parent of CG Semi, said in a statement.

"For India to become a truly global player in the semiconductor space, it is critical that we build a semiconductor cluster in a concentrated location similar to global leaders such as Taiwan. With a few facilities already announced in Gujarat, there are early signs of the state emerging as this cluster," he added.

Prime Minister Narendra Modi on Wednesday virtually laid the foundation stone for the CG Semi’s factory at Sanand. This facility will be set up in a land area of 28 acres with an investment of Rs 7,600 crore, spread over a period of five years.

This facility will manufacture a wide array of products catering to industries such as automotive, consumer, industrial, 5G, and others with a capacity to ramp up production to 1.5 crore units per day.

CG Semi is a three-way joint venture between CG Power (92.34 per cent stake), Renesas Electronics Corporation (6.76 per cent), and Stars Microelectronics (Thailand) Public Co. Ltd (0.90 per cent).

As per the agreement, CG Power, Renesas and Stars are to subscribe in one or more tranches, subject to satisfaction of conditions precedent up to $205 million, $15 million, and $2 million, respectively, towards equity capital of CG Semi, it was announced earlier.