OSAT: outsourced semiconductor assembly and test

Updated 2026-10-17

OSAT stands for outsourced semiconductor assembly and test. An OSAT plant takes finished silicon wafers from a chip maker, cuts them into dies, packages each die so it can be soldered to a board, and tests the result. It is the back end of chip making; the front end is the wafer fab.

OSAT

Outsourced semiconductor assembly and test: a plant that receives finished silicon wafers from a chip maker, dices them, packages each die into a chip that can be soldered onto a circuit board, and tests it. The back end of semiconductor manufacturing, as distinct from the wafer fab.

What an OSAT plant does

A chip is made in two halves. The wafer fab grows and etches the circuits onto a silicon wafer, a disc the size of a dinner plate carrying hundreds or thousands of identical chips. An OSAT plant takes that finished wafer and does everything after: it saws the wafer into individual dies, mounts each die on a substrate, connects it with wires or bumps, encases it in a package with the pins or pads a circuit board can be soldered to, and tests each packaged chip before shipping.

“Outsourced” is the business model, not a technical term. Many chip designers own no factory at all and send wafers made by one contractor to be packaged by another. In India the same stage is often called ATMP, for assembly, testing, marking and packaging, and the two words are used interchangeably in government documents.

Why it comes first in India

Packaging plants cost a fraction of a wafer fab and can be built in two to three years, so they are the stage India has been able to start with. The India Semiconductor Mission’s incentives cover OSAT and ATMP units alongside fabs. CG Semi’s G1 plant in Sanand, Gujarat, which began commercial production in July 2026 with a peak capacity of 300 million units a year, is one of the first to reach output; the story of that plant is reported here.

What an OSAT plant buys

Cleanroom fit-out, precision fixtures, die-handling and test equipment, compressed air and power conditioning, material handling and long-term maintenance. Most of the equipment is imported; most of the fit-out, fixtures and services are bought locally, which is where a firm counted as an MSME meets the plant.

Semicon 2.0’s Machines and Materials pillar is the scheme aimed at changing the first half of that sentence: it pays 30% of capital expenditure to firms making semiconductor equipment, materials and test facilities in India, and the thresholds it sets start at ₹50 crore of capital investment.

Questions this raises

What does OSAT stand for?

Outsourced semiconductor assembly and test. An OSAT plant takes finished silicon wafers from a chip maker, saws each wafer into individual dies, mounts a die on a substrate, connects it with wires or bumps, encases it in a package with pins or pads a circuit board can be soldered to, and tests the packaged chip before it ships. "Outsourced" describes the business model rather than anything technical: many chip designers own no factory and send wafers made by one contractor to be packaged by another.

What is the difference between an OSAT and a wafer fab?

They are the two halves of making a chip. The wafer fab is the front end: it grows and etches the circuits onto a silicon wafer, a disc the size of a dinner plate carrying hundreds or thousands of identical chips. The OSAT is the back end, and it does everything after that wafer is finished. A packaging plant costs a fraction of what a wafer fab costs and can be built in two to three years, which is why the back end is the stage India has been able to start with.

Is ATMP the same as OSAT?

In Indian usage, yes. ATMP stands for assembly, testing, marking and packaging, and it names the same stage of chip making that OSAT names. Government documents use the two interchangeably, and the India Semiconductor Mission's incentives cover OSAT and ATMP units alongside wafer fabs.

What does an OSAT plant buy from local suppliers?

Cleanroom fit-out, precision fixtures, die-handling and test equipment, compressed air and power conditioning, material handling and long-term maintenance. Most of the equipment is imported; most of the fit-out, the fixtures and the services are bought locally, which is where an engineering firm meets a packaging plant without making chips itself.