 "India has embarked on a journey to carve out a sizeable slice of the global semiconductor pie, but the road ahead is long and arduous")
Semiconductor Manufacturing in India – Representative Picture
Tata Electronics is building two additional fabrication plants, known as fabs, in Dholera, Gujarat, according to a report by Mint. This expansion is part of the company’s broad strategy to develop a domestic chip manufacturing ecosystem that caters to increasing international demand, and establishing the company as a strong presence in the global semiconductor industry.
Tata’s first semiconductor fab to open in 2026
Construction of the first fab is already underway, with foundation work taking place at the Dholera Special Investment Region, where Tata Electronics broke ground in March this year. The plant will focus on manufacturing chips for power management circuits, display drivers, microcontrollers, and high-performance computing logic. These chips will be vital in sectors such as automotive, data storage, wireless communication, artificial intelligence (AI), and more. At peak capacity, the first fab is expected to manufacture up to 50,000 wafers each month.
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The first phase of the project, valued at Rs 91,000 crore, is being developed in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC). Production at the first fab is scheduled to begin by 2026.
Tata Electronics’ second and third chipmaking units
The second and third fabs are expected to be on a similar scale to the first, with plans to commence construction within the next five to seven years. However, it is unclear whether Tata Electronics will continue to partner with PSMC for the subsequent two fab projects. The report explained that partnerships for the second and third fab units as well as specifications of the technology and infrastructure will depend on the global semiconductor market and its requirements at that time.
The infrastructure for all three fabs may share common elements, some of which are being constructed as part of the first phase. This shared infrastructure could help reduce the financial outlay required for subsequent phases, though the investment will still be substantial, said a senior executive involved in the project.
Tata Electronics is already in talks with several potential buyers for the chips produced at the Dholera fab. Some of the initial customers are expected to come from within the Tata Group itself, including Tata Motors, Tata Play, and Tata Teleservices, all of which are significant consumers of integrated circuits. In addition to chip manufacturing, Tata is also working on establishing a robust supply chain ecosystem by collaborating with suppliers and partners to build local ancillary units.
A residential facility to accommodate around 4,000-5,000 workers who will be employed at the Dholera fab is also under construction.
Tata Electronics’ Assam chip factory
Tata’s expansion efforts are not limited to Gujarat. The company is also making significant progress on Rs 27,000 crore assembly and testing unit in Jagiroad, Assam. Work on this site commenced last month, with environmental assessments, flood risk analysis, and other preliminary studies already completed. The 600-acre Assam facility, scheduled to start high-volume production by mid-2025, will have a daily output capacity of 48 million chips. It will focus on three core technologies: wire bond, flip chip, and Integrated Systems Packaging (ISP), with plans to explore more advanced packaging solutions in the future.
First Published: Sep 16 2024 | 4:31 PM IST
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