CG Power teams up with Renesas and Stars Microelectronics for India's new OSAT facility

9 Feb 2024 , 12:49 PM

Renesas Electronics America Inc. and Stars Microelectronics (Thailand) Public Co. have entered into an agreement with CG Power and Industrial Solutions Ltd. to establish an Outsourced Semiconductor Assembly and Testing (OSAT) facility in India.

According to the statement, CG has signed technology and services, offtake and production agreements with Japan’s Renesas Electronics Corporation as well as a technical assistance and technology know-how sharing arrangement with Stars. 

The Ministry of Electronics and Information Technology’s (MeitY) approval as well as any applicable federal and state subsidies are among the regulatory and legal approvals that the joint venture is subject to.

In a notice to the exchanges, CG Power and Industrial Solutions also stated that, subject to certain requirements, CG Power, Renesas, and Stars will contribute up to $205 million, $15 million, and $2 million, respectively, to the equity capital of the joint venture company, with stakes of roughly 92.34%, 6.76%, and 0.90%, respectively. 

The approval of government subsidies, board composition, reserved matters, preemptive and additional subscription rights, right of first offer, tag-along right, put option, and call option are among the important provisions of the agreement. 

The JV takes effect after the project is approved. Closing of the proposed project transaction is subject to meeting JV-specific requirements.

In November 2023, CG Power made public that it had submitted an application to the government to establish an outsourced semiconductor assembly and testing facility, with a planned five-year expenditure of approximately $791 million.

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