India launches third semiconductor plant as CG Semi begins commercial production in Gujarat

India’s third semiconductor OSAT facility going live reveals more about systemic gaps than industrial prowess. While packaging is a back-end process, advanced packaging now tightly integrates with front-end fabrication—a domain where India lacks domestic EDA tools, IP libraries, and wafer capacity. Short-term subsidies may attract investment, but long-term operational risks loom from export controls, talent shortages, and unreliable power infrastructure. This move pressures Southeast Asian OSAT players to accelerate shifts to Vietnam and Malaysia for cost competitiveness, while prompting firms from Taiwan, China and South Korea to double down on localized production in the U.S. and Europe. Over the next 12–24 months, India may emerge as a regional hub for low-end packaging—but without closing the design-fab-packaging loop, its semiconductor self-reliance ambition will remain confined to assembly-tier activities.