Why in News?
The Andhra Pradesh government finalised arrangements for its first semiconductor project under the India Semiconductor Mission (ISM). The project — an OSAT (Outsourced Semiconductor Assembly and Test) facility — is proposed by M/s. Advanced System in Package Technologies Private Limited at Tarluvada village, Anandapuram mandal, Visakhapatnam district.
Key Facts About the Project
- Project Type: OSAT (Outsourced Semiconductor Assembly and Test) facility
- Proposed by: M/s. Advanced System in Package Technologies Pvt. Ltd.
- Total Investment: ₹2,387.81 crore (executed in two phases)
- Phase 1 Outlay: ₹542.19 crore
- Phase 2 Outlay: ₹1,845.61 crore
What is OSAT (Outsourced Semiconductor Assembly and Test)?
OSAT refers to companies that provide semiconductor chip packaging and testing services on behalf of chip designers and fabless semiconductor companies. They are a critical part of the semiconductor supply chain between chip fabrication (fabs) and end-product manufacturers.
- OSAT covers: die attach, wire bonding, encapsulation, and testing of packaged chips
- Distinct from Semiconductor Fab (which actually manufactures chips via lithography)
India Semiconductor Mission (ISM) — Key Facts for Prelims
- Launched under: Ministry of Electronics and Information Technology (MeitY)
- Approved outlay: ₹76,000 crore (approx. $10 billion) under Semicon India Programme
- India Semiconductor Mission is the nodal agency for semiconductor and display fab incentive schemes
- Objective: Build a vibrant semiconductor and display ecosystem in India; reduce import dependency
- Incentive: Up to 50% fiscal support on project cost for eligible semiconductor fabs
- Covers: Semiconductor Fabs, Display Fabs, ATMP/OSAT facilities, Semiconductor Design
Key Approvals under Semicon India
- Tata Electronics – semiconductor fab in partnership with Taiwan’s PSMC (Dholera, Gujarat)
- CG Power (Renesas/Stars Microelectronics) – ATMP facility (Sanand, Gujarat)
- Kaynes Semicon – ATMP facility (Sanand, Gujarat)
- This Vizag OSAT is AP’s first project under ISM
Interconnected Static Concepts for Prelims
Semiconductor Value Chain
- Design → Fabrication (Fab) → Assembly, Test, Marking & Packaging (ATMP/OSAT) → End Products
- India currently strong in semiconductor design; building capacity in fab and OSAT
Semicon India Programme 2021
- Approved by Cabinet in December 2021
- Part of India’s Production Linked Incentive (PLI) ecosystem
- Aims to make India a global semiconductor hub by 2030
Quick Revision Table
| Parameter | Key Fact |
|---|---|
| Project Type | OSAT (Outsourced Semiconductor Assembly and Test) |
| State | Andhra Pradesh |
| Project Proponent | M/s. Advanced System in Package Technologies Pvt. Ltd. |
| Total Investment | ₹2,387.81 crore |
| Phase 1 Investment | ₹542.19 crore |
| Phase 2 Investment | ₹1,845.61 crore |
| Mission Name | India Semiconductor Mission (ISM) |
| Parent Scheme | Semicon India Programme |
| Nodal Ministry | Ministry of Electronics and IT (MeitY) |
| Total ISM Outlay | ₹76,000 crore (~$10 billion) |
| ISM Fiscal Support | Up to 50% of project cost |
Trap / Confusing Points
| Common Confusion | Correct Fact |
|---|---|
| OSAT = Semiconductor Fabrication (Fab) | ❌ OSAT = Assembly & Testing (post-fab); Fab = actual chip manufacturing |
| ISM is under Ministry of Commerce | ❌ Under Ministry of Electronics and IT (MeitY) |
| ISM covers only Fab units | ❌ Covers Fabs, Display Fabs, ATMP/OSAT, and Semiconductor Design too |
| India’s first semiconductor fab is in AP | ❌ Tata fab is in Dholera, Gujarat; this Vizag project is AP’s first under ISM |
| Semicon India was launched in 2023 | ❌ Approved by Cabinet in December 2021 |
Practice MCQs
1. India Semiconductor Mission (ISM) functions under which ministry?
a. Ministry of Heavy Industries
b. Ministry of Commerce and Industry
c. Ministry of Electronics and Information Technology (MeitY)
d. Ministry of Science and Technology
Ans: C
ISM is a nodal agency under MeitY, set up under the Semicon India Programme with an outlay of ₹76,000 crore to build a semiconductor and display ecosystem in India.
2. What does OSAT stand for in the semiconductor industry?
a. Overseas Semiconductor Assembly Terminal
b. Outsourced Semiconductor Assembly and Test
c. Original Semiconductor Automation Technology
d. Output Semiconductor Assembly Testing
Ans: B
OSAT = Outsourced Semiconductor Assembly and Test. OSAT firms handle chip packaging and testing — a critical post-fabrication step in the semiconductor supply chain.
3. The Vizag OSAT facility under India Semiconductor Mission involves a total investment of:
a. ₹542.19 crore
b. ₹1,845.61 crore
c. ₹2,387.81 crore
d. ₹76,000 crore
Ans: C
Total investment = ₹2,387.81 crore in two phases: Phase 1 = ₹542.19 crore and Phase 2 = ₹1,845.61 crore.
4. Tata Electronics’ semiconductor fab under ISM is located in which city?
a. Visakhapatnam
b. Sanand
c. Dholera
d. Bengaluru
Ans: C
Tata Electronics’ semiconductor fab (with Taiwan’s PSMC) is in Dholera, Gujarat. Sanand (Gujarat) is for CG Power and Kaynes ATMP facilities.
5. What is the correct semiconductor value chain order?
a. Design → OSAT → Fabrication → End Products
b. Fabrication → Design → OSAT → End Products
c. Design → Fabrication → OSAT → End Products
d. OSAT → Design → Fabrication → End Products
Ans: C
The correct order is: Design → Fabrication (Fab) → Assembly, Test, Marking & Packaging (ATMP/OSAT) → End Products. India is strong in Design and building fab and OSAT capacity.
To learn current affairs from exam point of view, Click here
To know more about India’s semiconductor mission and the Vizag OSAT project, Click here
