Suchi Semicon delivers pilot chips to us, awaiting government approval for financial benefits
Co-founder Shetal Mehta told Mint In an interview, the buyer was refused to be identified.
The startup is awaiting approval of the Indian Semiconductor Mission (ISM) for incentives provided by the government, hoping that the milestone will “open more doors”.
Since its operations began in December 2024, Suchi has focused on setting up machines, assembling virtual wafers and training staff.
“There are no well-trained people, so the first three months are about experimenting and cultivating our workforce,” Mehta said.
The first commercial wafer arrived in Suchi in March and after successful rally and internal testing, pilot shipments were dispatched in mid-April. US customers will evaluate it within two weeks, after which Suchi plans to start small batch production and gradually scale up.
After manufacturing, OSAT packs and tests semiconductor chips. When chip manufacturers produce silicon wafers, OSAT includes them in a protective case and tests and is ready for use in smartphones and cars. Currently, Suchi only handles packaging; according to Mehta, testing will be outsourced to client-nominated partners. American customers represent suchi’s crucial “anchor”.
“In semiconductors, one customer takes confidence, which builds credibility with others,” Mehta explained, adding that negotiations were held with 10 potential customers in India and abroad.
Emerging Center
Mehta’s job cuts. On the positive side, geopolitical factors such as trade tensions and supply chain diversification are driving states to invest in domestic semiconductor capabilities. As a result, regions such as India are becoming potential hubs for semiconductor manufacturing and OSAT services.
But he also faces challenges. First, India has approved three OSAT projects. Tata Electronics Private Ltd (TEPL) to invest ₹USD 271.2 billion, using local technology to build facilities in Assam with a daily production capacity of 48 million vehicles.
CG Power and Industrial Solutions Ltd will invest ₹Rs 7,584 crore, with Renesas Electronics (US/Japan) and STARS MicroelectRonic (Thailand), the OSAT facility is set up with a goal of 15.07 million units per day.
Mysuru-based Kaynes Technology India Ltd (KTIL) will invest ₹Gujarat produces over 6.333 million chips per day with global technology partners. It is reported that Foxconn also plans to invest ₹Rs 424 crore in semiconductor joint venture with the HCL group, which includes the OSAT plant.
Secondly, according to a priori study, the global OSAT market size is expected to grow from US$46.5 billion in 2025 to US$92.2 billion by 2034. The size of the Asia-Pacific OSAT market is US$26.3 billion in 2024 and is expected to increase to US$56.2 billion by 2034.
However, this segment is dominated by some large companies (Taiwan), which owns about 50% of the market, followed by Amkor Technology (US), about 18% and JCET Group (China) about 12%. Together, 80% of the market control makes it a highly consolidated industry.
Mehta remains optimistic about ISM winning approvals to get government incentives and support for the Indian program, which is spending ₹The country’s semiconductor and display manufacturing ecosystem has developed 760 million. The plan includes financial support for 50% of capital expenditures in establishing OSAT facilities.
“Approval is slow because the industry has no benchmarks. But once approved, credibility and financial support will be a game-changer,” he said.
The company currently has approximately 80 employees, including experienced professionals from Southeast Asia, with decades of experience.
He added: “We are in a challenging space, but there are difficulties and opportunities.”
Building an OSAT facility involves significant investment, although it costs significantly less than building a chip factory. The cost of a basic OSAT factory is $100 million, while the price of a premium factory is $500 million ( ₹40 million). Most companies invest in the stage, starting with small and expanding capabilities as demand grows.
Natural synergistic
Suchi plans to invest $100 million in phases over five years. Mehta noted that the project is “a capital expenditure-intensive business, but mainly self-funded.” “There is no venture capital or funding yet. We have not been following this path yet. But if large funds want to invest in this area, we will be open.”
The first ₹The 1 million phase is to establish flight lines and core infrastructure.
“By the end of this year, we aim to produce 300,000 pieces a day, expand by up to 1 million, then 2 million, and last 3 million,” Mehta said. He added that he “expected to shut down.” ₹The annual revenue for this fiscal year is 700 million. ”
According to Mehta, Suchi Group also plans to leverage semiconductor design, which he notes is a “supplement” business. He believes that although OSAT is capital-intensive, design is not. “India already has a strong design foundation. This is a natural synergy with packaging,” he said. ₹The vertical direction is 50 million.
“We are at the same stage as China 20 years ago,” Mehta said. With strategic investments, policy support and global supply chain readjustment, he believes India’s OSAT sector could be a powerful alternative to the semiconductor value chain.
