Tata Bets Big on Electronic Chips

On 13 March 2024, in an official ceremony, Indian PM Narendra Modi laid the foundation stone virtually for a semiconductor fab in his hometown state of Gujarat. Tata is the promoter of the project located in the Dholera Special Investment Region (DSIR) and plans to invest INR 910 billion (91,000 crore) on the first electronic chip manufacturing plant in India.

As part of the plan, Tata is ploughing INR 270 billion (27,000 crore) to set up an Outsourced Semiconductor Assembly and Test (OSAT) facility in Morigaon, Assam. Ultimately, the vision of the Government of India is to make India into a world-class electronics manufacturing hub with a complete ecosystem from chip design to assembly and final electronic product.

“India can significantly benefit from geopolitical shifts … We have already set up a business to seize the promise of #hitech manufacturing of electronics, precision manufacturing, assembly and testing of semiconductors in the medium term.”

Tata Chairman Natarajan Chandrasekaran

Also present at the groundbreaking ceremony were Ashwini Vaishnaw the Union Minister of Electronics and IT, Rajeev Chandrasekhar the Chief Minister of Gujarat and Natarajan Chandrasekaran the Chairman of the Board of Tata Group. The Central and State governments are financing the project to the tune of USD 11 billion.

The value created by the Indian Semiconductor Industry is expected to exceed USD 1 trillion and will support about 100,000 jobs. India ambitions to be among the Top Five Global Players in the Semiconductor Industry by 2030.

For this massive project, Tata Group created a special arm called Tata Electronics, which partnered with Taiwanese Powerchip Semiconductor Manufacturing Corporation (PSMC). The fab will make use of AI to optimize its manufacturing processes and will initially output mature chips such power electronics, display drivers and other peripheral IC.

If everything goes according to plan, the Fab will become operational by the end of 2026 and will be able to output 50,000 wafers monthly. From a technical perspective, the Fab will be able produce 28nm chips, with the possibility to upgrade to 22nm. For reference, the current state-of-the-art is based on 3nnm technology. However, Tata chose strategically to position itself into the lower end of the semiconductor segment for starters.