"We have shipped our first pilot batch to a US-based client," co-founder Shetal Mehta told Mint in an interview, declining to identify the buyer.

The startup, which is awaiting approval from the India Semiconductor Mission (ISM) for incentives offered by the government, hopes this milestone will “open more doors."

Since starting operations in December 2024, Suchi focused on setting up machines, assembling dummy wafers and training staff.

“There were no trained people available, so the first three months were about trials and building our workforce," Mehta said.

The first commercial wafer arrived at Suchi in March and following successful assembly and internal tests, the pilot shipment was dispatched in mid-April. The US client will evaluate it over two weeks, after which Suchi plans to start small-batch production and scale up gradually.

OSAT companies package and test semiconductor chips after fabrication. While chipmakers produce the silicon wafers, OSAT firms encase them in protective housing and test them, preparing them for use in smartphones and cars. Currently, Suchi handles only packaging; testing is outsourced to a partner nominated by the client, according to Mehta. The US customer represents a crucial "anchor" for Suchi.

“In semiconductors, one client takes a leap of faith and that builds credibility with others," Mehta explained, adding that talks are under way with 10 potential clients in India and abroad.

Emerging hub

Mehta has his work cut out. On the positive side, geopolitical factors such as trade tensions and the push for supply chain diversification are prompting countries to invest in domestic semiconductor capabilities. As a result, regions such as India are emerging as potential hubs for semiconductor manufacturing and OSAT services.

But he has his challenges, too. For one, India has already approved three OSAT projects. Tata Electronics Private Ltd (TEPL) will invest ₹27,120 crore to build a facility with a production capacity of 48 million units per day in Assam, using indigenous technologies.

CG Power and Industrial Solutions Ltd will invest ₹7,584 crore to set up an OSAT facility in partnership with Renesas Electronics (US/Japan) and STARS Microelectronic (Thailand), targeting 15.07 million units per day.

Mysuru-based Kaynes Technology India Ltd (KTIL) will invest ₹3,307 crore in Gujarat to produce over 6.33 million chips daily with global technology partners. Foxconn, too, is reportedly planning to invest up to ₹424 crore in a semiconductor joint venture with HCL Group that includes an OSAT plant.

Secondly, the global OSAT market size is projected to grow to $92.2 billion by 2034 from $46.5 billion in 2025, according to Precedence Research. The Asia-Pacific OSAT market size was $26.3 billion in 2024 and is expected to increase to $56.2 billion by 2034.

However, this segment is dominated by a few large companies—ASE Technology Holding (Taiwan), which holds about 50% of the market, followed by Amkor Technology (US) with about 18%, and JCET Group (China) at about 12%. Together, the top three control over 80% of the market, making it a highly consolidated industry.

Mehta remains optimistic of winning approval from the ISM to get government incentives and support under the Semicon India programme, which has an outlay of ₹76,000 crore for the development of the semiconductor and display manufacturing ecosystem in the country. The scheme includes fiscal support of 50% of the capital expenditure on setting up OSAT facilities.

“Approvals are slow because the industry isn’t benchmarked. But once approved, the credibility and fiscal support will be a game-changer," he said.

The company currently employs about 80 people, including seasoned professionals from Southeast Asia with decades of experience.

“We’re in a challenging space—but where there’s difficulty, there’s opportunity," he added.

Setting up an OSAT facility involves substantial investment, though it costs significantly less than building a chip fab. A basic OSAT facility costs $100-200 million, while advanced plants can go beyond $500 million ( ₹4,000 crore). Most companies invest in phases, starting small and expanding capacity as demand grows.

Natural synergy

Suchi plans a phased $100 million investment over five years. Mehta pointed out that the project is "a capex-intensive business but is majorly self-funded." He added that "there are no VCs or funds at the moment. We have not looked at that path. But we are open if a big fund is looking to invest in this space."

The first ₹100 crore phase was to build the pilot line and core infrastructure.

“By the end of this year, we aim to produce 300,000 pieces per day, scaling up to 1 million, then 2 million, and finally 3 million," Mehta said. He added that he is "expecting to close around ₹70 crore in annual revenue this financial year."

The Suchi Group, according to Mehta, also plans to tap into semiconductor design, which he pointed out is a "complementary" business. He reasons that while OSAT is capital-intensive, design is not. “India already has a strong design base. It's a natural synergy with packaging," he said, noting plans to invest under ₹5 crore in this vertical.

“We’re at the same stage as China was 20 years ago," Mehta said, underscoring India’s potential to build a resilient packaging ecosystem. With strategic investments, policy support, and global realignment of supply chains, he believes India’s OSAT sector could emerge as a strong alternative in the semiconductor value chain.