Can the Foxconn-HCL wafer-level packaging project put India on the global semiconductor map?

In a landmark move for India’s semiconductor ambitions, the Union Cabinet has approved a ₹3,706 crore proposal by HCL Group and Hon Hai Technology Group (Foxconn) to set up a semiconductor Outsourced Semiconductor Assembly and Test (OSAT) facility near the upcoming Jewar airport in Uttar Pradesh. Marking the sixth semiconductor project approved under the India Semiconductor Mission, and the fifth in chip packaging, what sets this one apart is its focus on wafer-level packaging (WLP)—a more advanced and value-added form of chip assembly that brings India closer to global technology standards.

According to HCL Group Chairperson Roshni Nadar Malhotra, the project will combine “HCL’s engineering DNA” with “Foxconn’s semiconductor capabilities” to support sectors such as consumer electronics, automotive, and industrial systems. The company has not disclosed details about the technology partner for the packaging plant yet. However, the facility will package display driver chips used in mobile phones, laptops, PCs, and cars, with a projected capacity of 20,000 wafers per month and employment generation for over 3,500 people.

But beyond the scale and economic impact lies a deeper strategic significance: India’s entry into the world of advanced chip packaging.

What is WLP, and why does it matter?

Unlike traditional chip packaging, where the wafer is diced individually first and then packaged, in WLP, the entire packaging process is done while the chip is still part of the wafer. Pegged as a more advanced approach to chip packaging by experts, this method offers better precision, fewer chances of damage, and a more compact final product.

“As the chip is smaller in size, which is very important for devices like smartphones, wearables, and IoT devices, the connections inside are shorter and more direct, which helps with speed and power efficiency. It is a cleaner, faster, and more efficient way to package chips, and going ahead it is going to be even more important as we move into more advanced semiconductor technologies,” says Devroop Dhar, co-founder and MD at Primus Partners, a business management consultancy firm.

WLP offers advantages at different levels, right from power efficiency to device performance. Danish Faruqui, CEO of Fab Economics—a US-based greenfield fab and OSAT consultancy and semiconductor investment advisory — explains, “WLP allows wafer-level integration of various assembly and packaging materials and other silicon dies, which results in improved power efficiency due to shorter interconnects and lower resistance within the package. The reduced parasitic capacitance because of higher interconnect density results in improved device performance. Area reduction miniaturisation—i.e., reduction of x, y, z scales of the final product—leads to compact and thinner products.” The approach also brings down cost per package, increases throughput for faster time-to-market, and delivers higher yield and reliability with lower equipment cost of ownership—all of which contribute to more efficient OSAT operations and reduced cost of goods sold.

The sudden rise in advanced packaging, including WLP, is due to the slowing down of Moore's Law—the idea that the number of transistors on a chip doubles roughly every two years. As a result, the industry is shifting focus from transistor miniaturisation to innovation in chip packaging and architecture. Global leaders including Infineon, STMicroelectronics, Intel, ASE, Amkor, JCET, SK Hynix, Micron, Tongfu Micro, KYEC, Powertech, and TSMC have already invested billions into advanced packaging technologies and have built significant WLP capacities.

For instance, TSMC adopted Fan-Out WLP (FOWLP) for the first time in 2016 for the Apple iPhone 7 and changed the game globally. Since then, TSMC has become the largest supplier of FOWLP packaging, with Apple being one of the high-volume consumers of FOWLP, adds Faruqui. FOWLP is a packaging technology that makes chips thinner, faster, and more power-efficient by extending connections beyond the chip’s edge—an innovation that has shaped the direction of advanced packaging over the last decade.

Moving up the value chain

So far, India’s semiconductor strategy has primarily focused on ATMP (Assembly, Testing, Marking, and Packaging) units and mature-node fabs—largely due to the high cost and complexity of advanced front-end manufacturing. However, WLP sits higher on the value chain and requires cleanroom environments, precision tooling, and highly skilled engineering talent. Experts view the recent approval of the HCL-Foxconn WLP project as a significant milestone. While India has had some backend assembly and testing capacity in the past, this marks the first serious move toward building advanced packaging capabilities—crucial for supporting next-generation chip designs.

Dhar of Primus Partners adds, “WLP requires more upfront investment than traditional packaging because of Cleanroom Class 10 and Class 100 requirements, specialised equipment for RDL (Redistribution Layers), bumping and wafer thinning, and more precise temperature and pressure controls.”

Investment and timelines for establishing a WLP facility may vary and are based on factors such as the scale of operations, technological complexity, and regional considerations.

According to Fab Economics, at an aggregate level, a WLP-enabled OSAT should have at least a capacity of 50k WSPM, and project costs vary from $750 million to $3.5 billion based on packaging architectures. “The design, construction, equipping, and qualification timelines of WLP OSAT will typically be 30–40% longer than traditional OSAT because of stringent requirements intrinsic to WLP from a process, equipment, and operations perspective. However, ramp to HVM (high-volume manufacturing) is almost 50% faster in WLP process flows as compared to singulated packaging, due to much better process controls in wafer-level integration resulting in steeper device, yield, and reliability ramps,” says Faruqui of Fab Economics.

Commenting on the timelines, Manish Rawat, Semiconductor Analyst at TechInsights—a company that specialises in semiconductor and advanced technology analysis—says, “The scale-up period for WLP facilities typically spans two to three years or more before commercial viability, longer than traditional OSAT’s shorter ramp-up thanks to its maturity.” Explaining the reason behind the longer time-period, he adds that operational complexity is greater in WLP because of the integration of advanced processes like redistribution layers and precise thinning, demanding both capital and expertise. “To mitigate risks, global players adopt diversified investments, secure multiple supply agreements, and implement risk-sharing with partners—reflecting the strategic shift toward WLP despite its longer timelines and higher complexity.”

The global race for advanced packaging

Recent global events have underscored the critical role of semiconductors—not only in everyday electronics but also as the backbone of national defence systems. More than just components, chips have emerged as powerful geopolitical tools, increasingly wielded as levers in trade negotiations. It’s no surprise, then, that countries—including India—that once took a hands-off approach to semiconductor production are now racing to build domestic capabilities.

In advanced packaging, especially wafer-level technologies, countries like Taiwan, South Korea, and the US are clearly ahead, and each of them has taken a slightly different path to get there.

“Taiwan has built world-class capabilities by tightly linking packaging with its foundry ecosystem. Companies like TSMC and ASE Group have become global benchmarks. TSMC’s CoWoS and InFO packaging platforms are used by some of the most advanced chipmakers in the world, and they have made packaging an innovation engine and not just a backend process,” says Dhar.

South Korea has focussed heavily on advanced packaging for mobile and high-performance memory.

Dhar adds that in the US, companies like Intel and Amkor are leading in this space. Intel’s packaging platforms like Foveros (for 3D stacking) and EMIB (for chiplet integration) are critical to how they design future processors. Amkor is one of the biggest outsourced packaging players globally and has a strong footprint in both traditional and advanced technologies.

Rawat of TechInsights says, “Lam Research in the US supplies critical wafer-fabrication equipment and services essential for both front-end and back-end semiconductor manufacturing processes. Also, the CHIPS and Science Act is driving substantial investment, with firms like Intel and GlobalFoundries scaling up packaging capacities, exemplified by Samsung’s $40 billion Texas project.”

On the other hand, Japan's strength lies in high-precision tools and materials, and companies like Shinko, Ibiden, and Renesas have been key suppliers for global packaging players. Their ecosystem is quieter but extremely essential to how modern packaging works.

And lastly, China is pushing hard with government-backed investments. Companies like JCET and Huatian are scaling quickly, though they are still catching up in high-end packaging, says Dhar.

That said, India is entering the semiconductor race several decades behind these established players. While it contributes more than 20% of the world’s semiconductor design workforce, it is not home to any major player in the ecosystem—be it fabless, IDM, foundry, packaging, or tools. To catch up, India must act with strategic precision and long-term vision.

All these countries have built strong ecosystems over time through consistent R&D investment, skilled talent pipelines, close government-industry coordination, and a sharp focus on manufacturing infrastructure—and India can learn from these models as it aims to build its own capabilities.

For instance, while the ₹76,000 crore incentive was a good start, India specifically may have to up the ante in terms of government subsidy across the centre and states for bringing the first few advanced packaging sites to the country—including subsidy support for required materials, equipment ecosystem, and talent requirements. Talent is another area that India will have to actively work on. “WLP-enabled advanced packaging talent has distinct requirements, different from fab or legacy OSAT site requirements. Even in the US, few universities excel in advanced packaging research and talent development. Therefore, the worldwide leader in advanced packaging technologies—Intel—has over 10,000 employees in Assembly, Packaging and Test Technology Development (TD) sites in Arizona and Oregon, who are mostly MS or PhD candidates and home-grown TD talent,” adds Faruqui of Fab Economics.

If India can overcome initial teething challenges and successfully operationalise even a handful of advanced ATMP facilities with wafer-level packaging capabilities in the coming years, it would mark a pivotal step towards establishing a credible footprint in strategic sectors such as automotive, communications, and consumer electronics—where the need for trusted, high-quality packaging capacity continues to grow.