News
Indian government approves subsidies for Mitsui & Co. and Aoi Electronics semiconductor back-end plant
Saturday, March 7, 2026 at 04:24 AM
The Indian government has approved approximately 30 billion yen in subsidies for a semiconductor back-end assembly and testing facility. Mitsui & Co. and Aoi Electronics are partnering on the project located in western India, which carries a total investment cost of 33 billion rupees (approximately 57 billion yen).
Context
The Indian government has approved a significant subsidy for a new semiconductor back-end plant in Sanand, Gujarat, a joint venture involving Kaynes Semicon, Mitsui & Co., and AOI Electronics. The project, valued at approximately 33 billion rupees ($395 million), will receive a 50% government subsidy under the India Semiconductor Mission (ISM). This facility marks a critical expansion of India’s domestic Outsourced Semiconductor Assembly and Test (OSAT) capabilities, targeting a production capacity of 6 million chips per day.
This strategic alliance leverages AOI Electronics' advanced technical expertise in packaging and Mitsui & Co.'s global supply chain network, with Mitsui securing exclusive rights to handle raw material procurement and future equity options. The plant is expected to commence operations in the second half of 2026, focusing on high-demand segments including automotive ICs, AI chips, and consumer electronics. By localizing these high-value processes, the initiative strengthens India’s position as a rising alternative to China in the global semiconductor supply chain.
Sources (10)
Mitsui to Support the Establishment of Semiconductor Back-end Manufacturing Business by Kaynes of India | 2026 | Topics | MITSUI & CO., LTD.India's Kaynes Semicon outlines OSAT roadmap from power to advanced packagingIndia's Semiconductor MomentIndia Accelerates Electronics Manufacturing with Fresh ECMS Approvals - Global SMT & Packaging AsiaIndian Weekly News Updates: Dec. 17-Dec. 23, 2025 – ICC | International Cooperation Center[PDF] AOI Electronics to support the Establishment of Semiconductor Back ...GOVERNMENT OF INDIA MINISTRY OF ELECTRONICS ...Kaynes Semicon: Powering the Future of Semiconductor Innovation through Advanced R&D - Kaynes Semicon
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