CG Power Surges Over 11% as it Inks Semiconductor Facility Joint Venture

CG Power Surges Over 11% as it Inks Semiconductor Facility Joint Venture

VoM News Desk | March 1, 2024 | 12:14 PM IST | Breaking News | Follow on Google News

CG Power Surges Over 11% as it Inks Semiconductor Facility Joint Venture/Mint

CG Power Surges Over 11% as it Inks Semiconductor Facility Joint Venture

CG Power and Industrial Solutions witnessed an impressive surge of over 11% in its share price after sealing a joint venture deal to establish and operate an outsourced semiconductor assembly and test facility. Shares of CG Power rallied to ₹494.40 apiece on the BSE, reflecting investor confidence in the strategic move.

Joint Venture Agreement with Renesas Electronics Corporation and Stars Microelectronics

The agreement involves CG Power collaborating with Renesas Electronics Corporation, a prominent supplier of advanced semiconductor solutions, and Stars Microelectronics, a Thailand-based OSAT (outsourced semiconductor assembly and test) provider. The Union Cabinet, led by Prime Minister Narendra Modi, approved this joint venture project under India’s Semiconductor scheme on February 29.

CG Power aims to foster semiconductor capabilities and ecosystem development in India through this partnership. Renesas, headquartered in Japan, will contribute advanced semiconductor technology and expertise, while Stars Microelectronics will provide both legacy package technology and training support.

The joint venture will be predominantly owned by CG Power (92.3%), with Renesas and Stars Microelectronics holding equity capital of approximately 6.8% and 0.9%, respectively. Over a five-year period, the JV plans to invest ₹7,600 crore, utilizing a mix of subsidies, equity, and potential bank borrowings.

Strategic Diversification into Semiconductor Manufacturing

S Velleyan, the Managing Director of CG Power, expressed that entering semiconductor manufacturing signifies a strategic diversification for the company. The manufacturing facility, slated for Sanand, Gujarat, is poised to reach a capacity of 15 million units per day. The product range will encompass legacy packages like QFN and QFP to advanced packages such as FC BGA and FC CSP, catering to diverse industries including automotive, consumer, industrial, and 5G.

As of 10:25 am, CG Power shares continued to trade higher at ₹474.50 apiece on the BSE, reflecting ongoing investor positivity towards the venture.

VoM News Desk

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