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OSAT (outsourced semiconductor assembly & test)
What it is
Outsourced Semiconductor Assembly and Test - packaging fabricated wafers into finished chips and testing them. It is the back end of chipmaking, far less capital-intensive than a wafer fab and a realistic entry point for a new manufacturing nation
Multiple Indian OSAT plants became operational through 2025-26 across Gujarat, Assam and Rajasthan, alongside 13 approved semiconductor projects
Impact on industries
- India now has genuine operating capability rather than announcements, concentrated in memory packaging, automotive-grade chips and mature-node logic
- India-origin packaged semiconductors count toward domestic value addition under PLI, so OSAT output raises incentives for electronics OEMs that source locally
- Packaging is the lower-value end of the chip chain - wafer fabrication holds the technology and the margin, and India's first fab is still to yield silicon
- Requires ultra-pure gases, specialty chemicals and substrates that are themselves imported, so the dependency shifts upstream