Wipro Explores Entry into Semiconductors Through OSAT

Wipro Enterprises is exploring entry into semiconductor manufacturing through the outsourced semiconductor assembly and test (OSAT) route. The company is scouting for a global technology partner for the venture, according to a report by Economic Times.

The talks remain at an early stage. Wipro aims to diversify into the semiconductor sector as India expands its chip ecosystem. “The company is first looking to scout for a credible technology partner as that will be a critical and deciding factor,” a person aware of the development told ET.

India’s semiconductor push has encouraged several conglomerates to examine opportunities in chip assembly and packaging. Integrated circuits are now the country’s third-largest import item, prompting increased policy attention to domestic manufacturing.

Industry analysts say OSATs have emerged as the most accessible entry point for Indian companies seeking to enter semiconductor manufacturing. India’s 50% capital expenditure incentive under the India Semiconductor Mission (ISM) helps reduce entry barriers for new facilities.

“Between OSAT and foundry operations, the former is relatively more accessible as it requires significantly lower CAPEX, carries less risk, and leverages India’s existing strengths in engineering, design, and testing,” Parv Sharma, Senior Analyst at Counterpoint Research, told AIM.

Other conglomerates have already announced semiconductor investments. Tata Group is building an OSAT facility in Assam, while CG Semi, part of the Murugappa Group, has launched the first unit of its OSAT project in Gujarat.

Analysts say Wipro’s existing capabilities could support a move into the semiconductor value chain. According to Sharma, Wipro’s structure already spans both services and infrastructure businesses.

“Wipro’s business model is bifurcated between services and infrastructure,” he said. “In the semiconductor space, Wipro offers deep engineering services, acting as an integral R&D arm for global firms.”

He added that the company’s newer electronics manufacturing materials division suggests a shift towards capturing value in the physical supply chain. Diversification also reflects broader changes in the technology sector.

“Diversification is a logical response to the rapid disruption of the services industry by AI, and India’s semiconductor pivot offers both growth potential and policy support,” Sharma said.

Wipro has already taken steps into related areas such as copper-clad laminate manufacturing, which analysts consider a relatively lower-risk segment of the electronics supply chain.

“While the Copper Clad Laminate space represents a calculated, lower-risk entry, full-scale semiconductor manufacturing is a high-risk endeavour that demands significant capital and specialised process expertise,” Sharma said.

Technical collaboration will also be essential if Indian companies aim to build competitive semiconductor packaging operations. “Successful OSAT operations will require collaboration, as technical know-how is paramount for homegrown companies,” Sharma said.

Companies from Japan, Taiwan, or the United States that want to diversify their manufacturing bases away from China could become potential partners for such ventures.

Sharma added that OSAT facilities can also generate domestic value within the semiconductor supply chain. “OSAT facilities create local value by transitioning from importing finished goods to importing components and adding local value through substrates, chemical supplies, and equipment maintenance.”