The race for chips is on: CG Semi’s 'massive' new facility won't be ready until 2029. Are we falling behind?

CG Power and Industrial Solutions expects commercial production at its upcoming G2 semiconductor facility, operated by CG Semi Private Limited, to begin towards the end of 2028 or in 2029, as construction progresses alongside customer development and qualification activities. During the company's second-quarter FY27 earnings call on Friday, Managing Director and CEO Amar Kaul said construction of the G2 facility was progressing well, with the company targeting the commencement of the qualification process by the middle of 2027. "The construction is progressing well, and we are targeting the qualification to commence middle of next year," Kaul said, adding that the qualification process typically takes two to three quarters. He said commercial production was expected towards the end of 2028 or in 2029. The company is simultaneously working on customer development and qualification, although management indicated that securing approvals and qualifying products remained a time-consuming process. Responding to a question on whether the company had secured new customers for the facility, Kaul said its business development team was continuously engaging with prospective customers. The update comes as CG Power continues to expand its semiconductor presence through manufacturing investments and acquisitions aimed at strengthening its chip design and engineering capabilities. Axiro expands semiconductor design capabilities CG Power also announced that its wholly owned subsidiary, Axiro Semiconductor, had completed the acquisition of a 100% equity stake in Tosil Systems Private Limited for Rs 16.4 crore on August 20, 2026. Management said the acquisition was part of CG Power's broader strategy to develop semiconductor design capabilities alongside its manufacturing investments. "This is a step forward in the direction of what I have been saying earlier, into building our competence and capability in the design capability of semiconductors," Kaul said. The acquisition is expected to strengthen the group's semiconductor engineering capabilities and expand its presence across different stages of chip development. CG Power said continued investments in talent across its semiconductor subsidiaries, including CG Semi and Axiro, had partly offset the benefits of improved operating performance at the consolidated level. The company indicated that these investments were part of its efforts to build the capabilities required to expand its semiconductor operations. On the investment front, management said CG Power had invested approximately Rs 1,000 crore in its semiconductor venture so far. During the call, management also indicated that approximately Rs 1,000 crore had been received as capital support from the central government, taking the combined amount discussed as spent to around Rs 2,000 crore. The company said government capital support was being netted against assets in its balance sheet. CG Power and Industrial Solutions on Friday reported a 44% year-on-year increase in consolidated net profit to Rs 409.09 crore for the September quarter of FY27, driven by strong revenue growth, improved margins and robust order inflows.