No-poach agreement in the works for India's OSAT and ATMP sector

Even as India ramps up its semiconductor industry, outsourced semiconductor assembly and test (OSAT) and assembly, test, marking, and packaging (ATMP) companies setting up plants in the country are informally discussing a proposal to restrict the cross-hiring of employees with less than three years’ experience at their current firms.

 

The move is aimed at helping companies recover the high costs of training employees in semiconductors — an industry that is still in its infancy in India.

 

Gunasegaran Archunan, chief executive officer (CEO) of Suchi Semicon, raised the idea in a LinkedIn post a day ago. He said that in recent conversations with industry leaders from Kaynes SemiCon, RRP Electronics, and CG Semi, he was encouraged to see a “strong alignment” on the issue.

 

The four companies have collectively announced investments of ~23,000 crore in the semiconductor space. Archunan has welcomed open discussion on the proposal and urged others in the industry to join and support it.

 

A similar practice, he said, was adopted in Malaysia during the early years of its semiconductor journey. It helped the country become a global hub for chip packaging, assembly, and testing — today holding a 13 per cent share of the global market, behind only Taiwan and China.

 

Queries sent to Archunan and Suchi Semicon Chairman Ashok Mehta did not elicit a response. Kaynes CEO Raghu Panicker and RRP Group of Companies Chairman Rajendra Chodankar also did not respond.

 

Explaining the rationale, OSAT executives said poaching employees soon after training disrupts operations and undermines the large investments required to build skilled teams. In an industry still at a formative stage in India, such disruptions could slow overall growth.

 

In Malaysia, Archunan recalled, multinationals tackled this by agreeing not to hire employees with less than three years’ experience from rival firms. 

OSAT executives argue that a similar restriction in India would allow employees time to learn, contribute, and grow before moving on. It would also safeguard companies’ training investments, offer employees structured long-term growth paths, and provide stability to India’s semiconductor ecosystem.

 

The government, meanwhile, has set ambitious goals for the OSAT/ATMP sector. Last year, Electronics and Information Technology Minister Ashwini Vaishnaw said India is targeting a 10 per cent share of the global market in this space within five years.

 

To meet that goal, the government estimates the sector will need over 1 million additional skilled workers by 2030. As part of its skilling plan, 270 universities are being equipped with semiconductor tools, training programmes, and OSAT pilot lines.

 

While India has a large talent pool of engineers, they require specialised training for the complex semiconductor industry where domestic expertise is limited. Many OSAT firms are initially sending engineers abroad, especially to Malaysia, for training. The cost of training an engineer overseas ranges from ~1.5 lakh to ~8 lakh.