Fabs, OSATs and ATMP: India's chip projects explained
The semiconductor value chain, its four business models, and where India's approved projects fit.
News about India's semiconductor projects uses a lot of acronyms: fab, OSAT, ATMP, IDM, foundry. They describe different stages of the value chain and different business models. Once the map is clear, it becomes much easier to see what each project is and what it needs.
The value chain in four stages
| Stage | What happens | Typical players |
|---|---|---|
| Design | Chip architecture, circuit design and verification, using EDA software and licensed IP blocks | NVIDIA, Qualcomm, AMD, MediaTek; EDA firms such as Synopsys and Cadence; IP firms such as Arm |
| Fabrication | Building the circuits on wafers in a fab (Part 2) | TSMC, Samsung, Intel, GlobalFoundries, UMC, PSMC, Micron |
| Assembly and test | Cutting wafers into chips, packaging them, and testing each one | ASE, Amkor, JCET, and in-house plants of device makers |
| Systems | Putting chips onto boards and into products | Electronics manufacturers and brands |
Four business models
IDM (integrated device manufacturer). Designs and makes its own chips in its own fabs. Intel, Samsung's memory business, Micron and Texas Instruments are examples.
Foundry. Manufactures chips designed by others. TSMC is the largest. GlobalFoundries, UMC and PSMC are other pure-play foundries.
Fabless company. Designs chips and has a foundry make them. NVIDIA, Qualcomm and AMD all work this way. This model let design companies grow without the cost of building fabs.
OSAT (outsourced semiconductor assembly and test). Provides packaging and testing as a service for chip companies.
Fab, ATMP and OSAT
A fab does the front-end work: turning blank wafers into wafers covered in working circuits. It is the most capital-intensive part of the chain. A large modern fab can cost from several billion dollars for a mature-node plant to more than twenty billion for the leading edge.
ATMP stands for assembly, testing, marking and packaging. It is the back-end work: dicing the wafer into individual dies, attaching each die to a substrate or lead frame, connecting it with wire bonds or solder bumps, sealing it in a package, marking it, and testing it before it ships. India's semiconductor policy uses "ATMP/OSAT" together. In practice, an ATMP unit may serve its own company, as Micron's plant does, while an OSAT sells the same services to many customers.
Back-end plants cost less than fabs and come up faster, which is why many countries, India included, start there. But they are not simple. Packaging has become one of the most important parts of the industry.
Why packaging now matters so much
For decades, packaging was seen as the low-value end of the chain. AI changed that. The most powerful AI processors are built from several pieces of silicon packaged together: one or more large logic dies placed beside stacks of high-bandwidth memory (HBM), all connected through a silicon interposer or bridge. These advanced packaging methods, with names like CoWoS, chiplets and 2.5D or 3D integration, have at times been the main bottleneck on how many AI accelerators the world can ship.
So when a country builds assembly and test capacity, the question is not only how much, but how advanced.
India's projects on the map
Under the first phase of the India Semiconductor Mission, the government approved 12 manufacturing projects with combined investment of more than ₹1.64 lakh crore. In July 2026 the Union Cabinet approved a second phase, ISM 2.0, with a budget outlay of ₹1.27 lakh crore. Some of the best-known projects:
- Tata Electronics and PSMC, Dholera, Gujarat. A front-end fab, planned at up to 50,000 wafers a month on nodes from 28 nm to 110 nm, with investment of up to ₹91,000 crore. India's first commercial fab.
- Micron, Sanand, Gujarat. An ATMP plant for Micron's memory products.
- Tata Semiconductor Assembly and Test, Jagiroad, Assam. A large OSAT covering a range of packaging technologies.
- CG Semi and Kaynes Semicon, Sanand, Gujarat. OSAT plants. Micron, Kaynes and CG Semi have started commercial production.
- HCL and Foxconn, Uttar Pradesh. A joint venture for display driver chips.
India also holds roughly a fifth of the world's chip design workforce, through the design centres of global companies and a growing number of domestic design firms. The country is strong at one end of the chain and is now building the other.
Next, in Part 4, we look at what node names like "28 nm" and "3 nm" actually mean, and why mature nodes are a sensible starting point.
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