Law firms CAM, AZB, and Hogan Lovells participate in CG Power's $351 million Quantum Invitational Preferential Offering (QIP)
CG Power and Industrial Solutions, a leading Indian multinational company, has announced a significant push into the semiconductor industry. The company is accelerating its foray with an Outsourced Semiconductor Assembly and Test (OSAT) project, which is set to start production at a mini-plant in Q3 2025, with the main facility expected by FY27.
The expansion is being funded through proceeds from a $351 million Qualified Institutional Placement (QIP). Leading law firms, including Cyril Amarchand Mangaldas, AZB & Partners, and Hogan Lovells, played key roles in structuring and executing the fundraising strategy for CG Power.
CG Power has formed a joint venture with Renesas Electronics America and Stars Microelectronics (Thailand) to establish the OSAT facility in Gujarat, India. The venture is backed by substantial investments, with CG Power contributing about $205 million over a five-year OSAT venture plan.
The company's semiconductor initiatives include two units: CG Semi, the OSAT assembly and testing facility, which is progressing well, and Axiro, which houses a radio frequency and chip-design business acquired from Renesas and related affiliates. Axiro has already begun generating revenue.
CG Power's investment plans include significant spending on building the OSAT plant and semiconductor service infrastructure. This aligns with India's emerging rise as a global semiconductor hub, with collaborations with other companies such as Tata, HCL, Foxconn, and Kaynes Semicon.
In terms of capital expenditure (capex), CG Power plans to invest $791 million over 5 years for the OSAT in Gujarat. This investment will support the company's ambitious plans to establish a strong presence in the semiconductor industry.
The OSAT facility in Gujarat is expected to have a daily production capacity of approximately 48 million chips. This will reinforce India's position in chip manufacturing and design, positioning the country as a significant player in the global semiconductor industry.
The funds raised through the QIP by CG Power are intended to support capital expenditure plans, potential acquisitions, and the company's foray into the semiconductor industry. The transaction in question, a fundraising of $351 million by CG Power through a Qualified Institutional Placement (QIP) of equity shares, was advised by a high-profile consortium of legal advisors, including Cyril Amarchand Mangaldas, AZB & Partners, and Hogan Lovells.
This strategic push into semiconductor manufacturing and chip design through aggressive capex, partnerships, and acquisitions backed by substantial fundraising and expert legal advisory is set to position CG Power as a major player in the global semiconductor industry.
CG Power's ambitious plans to establish a strong presence in the semiconductor industry involve significant investments, including the $205 million contributed by CG Power over a five-year OSAT venture plan for the OSAT facility. This aligns with the company's financial strategy, as the funds raised through the QIP are intended for capital expenditure plans, potential acquisitions, and investments in the semiconductor industry.
With the OSAT facility expected to have a daily production capacity of approximately 48 million chips, CG Power's ventures in semiconductor manufacturing and chip design will not only reinforce India's position in chip manufacturing and design but also position the country as a significant player in the global semiconductor industry, making it a major player in terms of business and investing in the sector.
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