CG Power confident in OSAT revenue despite AI-semiconductor challenges from DeepSeek

deepseek

CG Power and Industrial Solutions Ltd does not anticipate any risk to the future revenue projections of its upcoming OSAT facility in Gujarat, despite disruptions in the global AI and semiconductor market caused by the rise of Chinese AI startup DeepSeek.

The company’s top executive assured that the project is advancing according to its planned timeline.

Last year, the Murugappa Group firm kicked off the construction work for its Outsourced Semiconductor Assembly and Test (‘OSAT’) facility in Sanand, Gujarat, and has already spent Rs 40-50 crore towards the project.

“...that's as fresh as probably yesterday. But having said that, as of now that we don't see any risk. The project is exactly as per the timeline and we are staying focused to what we are supposed to do. And we will keep an eye on any of these changes,” Amar Kaul, MD and CG Power and Industrial Solutions CEO, told analysts on January 28.

The top executive was responding to an analyst question if the introduction of China’s DeepSeek, which claims to operate on fewer GPUs, will lead to a significant fall in chip prices that CG Power is looking to manufacture at its upcoming facility.

DeepSeek claims to offer a free alternative to ChatGPT, utilising models that are cheaper to establish and require fewer chips.

Shares of artificial intelligence driven-electronics manufacturing services (EMS) firms, including Dixon Technologies, Kaynes Technology, Netweb Technologies, and MIC Electronics, plummeted on January 28. These stocks are facing a ripple effect from a selloff in the shares of US chipmaker Nvidia, triggered by the emergence of Chinese AI start-up DeepSeek.

CG Power and Industrial Solutions Ltd anticipates generating revenue from its semiconductor business within a span of four years, coinciding with the completion of the OSAT project. It received approval from the Union Cabinet under India’s Semiconductor scheme to set up an Outsourced Semiconductor Assembly and Test (‘OSAT’) facility at Sanand, Gujarat.

Renesas Electronics Corporation, Japan and Stars Microelectronics, Thailand, are the Technology and joint venture partners for the OSAT facility.

The factory will manufacture a wide array of products – ranging from legacy packages such as QFN (quad flat no-lead) and QFP (quad flat package) to advanced packages such as FC BGA and FC CSP, which will cater to industries such as automotive, consumer, industrial and 5G among others with a capacity to ramp up production to 1.5 crore units per day, the company said previously.