South India’s First ISM-Approved OSAT Facility to Come Up in Visakhapatnam with Rs 2,500 Crore Investment
ASIP Technologies broke ground last week on a Rs 2,500 crore ($260 million) Outsourced Semiconductor Assembly and Test (OSAT) facility in Visakhapatnam, Andhra Pradesh South India’s first semiconductor assembly and test facility approved under the India Semiconductor Mission. The project, developed in partnership with South Korean technology company APACT, marks a direct response to one of the most persistent structural gaps in India’s semiconductor value chain: the near-complete absence of domestic packaging and testing capability.
The 30-acre facility will have an initial investment of over Rs 460 crore and is designed to package and test up to 96 million semiconductor devices annually. While India has built significant strength in semiconductor design over the past decade, the back-end of the chip manufacturing process assembly, packaging, and testing has remained largely offshore. Packaging and testing account for an estimated 30 to 40 percent of a semiconductor’s total manufacturing cost, meaning their absence from India’s domestic capability has translated directly into margin leakage and supply chain dependence for Indian electronics manufacturers.
The Visakhapatnam facility will initially support wire-bond and flip-chip ball grid array packaging before introducing advanced 2.5D and 3D packaging capabilities within two to three years — technologies that are central to next-generation chips for AI, high-performance computing, data centres, and high-speed communications. ASIP has also announced plans to invest an additional Rs 2,000 crore to scale up packaging operations as the facility matures, bringing total planned investment to Rs 4,500 crore.
APACT President and CEO Seong Dong Lee noted that the global semiconductor industry is actively seeking resilient and diversified supply chains, and positioned the Visakhapatnam facility as a node that will serve not just India’s domestic semiconductor mission but the broader global ecosystem, providing advanced packaging and testing solutions to international customers.
The project adds to a rapidly expanding ISM portfolio. As of early July, the mission had approved 12 projects worth approximately Rs 1.64 lakh crore. Earlier this year, the Union Cabinet approved investments of Rs 3,936 crore across two semiconductor projects in Gujarat, and in February, US memory chipmaker Micron launched operations at its $2.75 billion semiconductor assembly and test facility at Sanand Industrial Park near Ahmedabad — where INOX Air Products has developed a dedicated electronic specialty gas hub at Dholera to supply the ultra-high-purity gases that semiconductor packaging and testing processes require. The Visakhapatnam facility is also expected to support growing demand for industrial and electronic specialty gases, adding another layer of downstream industrial activity to the region.
The groundbreaking comes weeks after the Union Cabinet approved ISM 2.0 with a Rs 1.28 lakh crore outlay, extending the mission’s scope beyond fabrication toward equipment, materials, and supply chain depth — a direction the ASIP facility directly embodies.
