Cabinet approves CG Power’s Rs 7,600 crore semiconductor unit in Gujarat

The Union Cabinet approved Murugappa Group’s CG Power and Industrial Solutions Ltd to set up a semiconductor unit in Gujarat’s Sanand with an outlay of Rs 7,600 crore. CG Power, Renesas Electronics Corporation, Japan, and Stars Microelectronics, Thailand will be partners in this project, focusing on specialised chips.
Renesas Electronics Corporation is a prominent semiconductor company known for its expertise in micro-controllers, analogue, power, and System on Chip (‘SoC’) products. The new semiconductor unit by CG Power aims to produce 15 million chips per day for various applications including consumer, industrial, automotive, and power.
CG Power recently announced a joint venture with Renesas and Stars to establish an outsourced semiconductor assembly and testing facility. The total equity capital investment by the partners is expected to be $222 million, with CG Power holding the majority stake of 92.34 percent. However, the company also disclosed a tax demand notice of Rs 188,78,91,580 from the Income Tax Department for the Assessment Year 2022-23.
Despite the tax issues, CG Power’s shares closed positively on Thursday, trading at Rs 443.85 after opening at Rs 428.70. The approval from the Union Cabinet for the semiconductor unit marks a significant development for CG Power, as it strengthens its presence in the semiconductor industry and opens up new opportunities for growth in the market.