Tata Electronics, a subsidiary of Tata Sons Pvt. Ltd., is setting a new standard in India’s tech landscape with a massive $11 billion investment. This ambitious move will establish the country’s first semiconductor fabrication plant in Dholera, Gujarat, in partnership with Taiwan-based semiconductor company Powerchip Semiconductor Manufacturing Corporation (PSMC). The agreement is a crucial step toward creating a robust semiconductor ecosystem in India, positioning the nation as a rising player in the global chip market.
Unlocking Tata’s Massive Semiconductor Production Plan
Tata’s investment of INR 91,000 crores (~US$11 billion) marks a pivotal moment in India’s industrial development. The new semiconductor fab in Dholera will have the capacity to manufacture up to 50,000 wafers monthly. It will incorporate advanced automation technologies powered by artificial intelligence (AI), machine learning, and data analytics to maximize efficiency.
N Chandrasekaran, Chairman of Tata Sons, stated,
“We are pleased to partner with PSMC, whose technology and expertise will significantly accelerate our roadmap to pioneer semiconductor manufacturing in India. This collaboration is a key milestone. I am confident that our comprehensive technology partnership with PSMC will pave the way for innovation, drive growth, and strengthen the global semiconductor supply chain. It will position us to play a key role in the growing semiconductor market to serve global customers.”
Notably, PSMC will contribute to design expertise, construction, and technology transfer. This collaboration ensures that India will soon be home to a cutting-edge semiconductor facility catering to the growing demands of AI, automotive, wireless communication, and computing. Additionally, the chips manufactured at this fab will support essential applications, including power management, display drivers, microcontrollers, and high-performance computing.
Building an Ecosystem, Not Just a Fab
Tata’s partnership with PSMC is more than just building a factory; it’s about creating a complete semiconductor ecosystem. This collaboration will bring advanced technology, skills, and talent to India, strengthening the country’s position in the global semiconductor market.
The Indian government approved Tata’s plans, recognizing the strategic importance of building domestic semiconductor manufacturing capabilities. The plant will not only meet India’s chip demand but also serve international customers, pushing the nation to become a trusted player in the industry.
Furthermore, Tata’s bold vision aligns with the government’s “Make in India, For the World” initiative. The Dholera fab can potentially generate over 20,000 jobs, thereby directly boosting India’s tech and manufacturing sectors. With plans for more fabs, Tata aims to create over 100,000 skilled jobs in the future, indicating the significant impact of this project.
PSMC Pioneering Innovation in Semiconductor Manufacturing
PSMC, the seventh-largest pure-play foundry globally, operates six fabs in Taiwan and produces over 2.1 million wafers annually. Founded in 1994, PSMC successfully transitioned from DRAM production to advanced memory and logic chips, showcasing its adaptability in the semiconductor industry.
In 2023, the company reported total greenhouse gas emissions of 589,995 metric tons of CO2e from Scope 1 and 2, marking a 12.16% decrease from 2022. The primary emission hotspots in Scope 1 and 2 were fluorine-containing gases and purchased electricity, accounting for 94.71% of total emissions.
source: PSMC
In terms of Scope 3, PSMC reported 171,863 metric tons of CO2e, a 19.57% decrease from 2022. Major contributors in Scope 3 included fuel and energy-related activities and purchased goods and services. Overall, PSMC aims to strengthen collaborations with its value chain partners to enhance climate strategies and build a sustainable, low-carbon future.
Dr Frank Huang, Chairman of Powerchip Group and CEO of PSMC, said,
“We are excited to collaborate with Tata Electronics on this pioneering initiative to establish India’s first semiconductor Fab in Gujarat. It reflects our commitment to providing cutting-edge technology and expertise, helping Tata Electronics create a state-of-the-art facility that will catalyze India’s semiconductor landscape. This partnership represents a win-win situation, as it positions PSMC and the Taiwanese ecosystem to gain a significant first-mover advantage in the rapidly expanding Indian market while helping India achieve self-reliance in semiconductor manufacturing. I strongly believe that our partnership will be foundational to the India–Taiwan collaboration in semiconductors and will inspire more commercial and strategic tie-ups between the two sides.”
Strategic Alliances: Tata Electronics, Tata Motors, and ADI Unite for Semiconductor Innovation
Tata Electronics has also been actively forging partnerships to strengthen India’s semiconductor capabilities. A Memorandum of Understanding (MoU) was recently signed between Tata Electronics, Tata Motors, Tejas Networks, and America-based Analog Devices (ADI). This collaboration aims to explore semiconductor manufacturing opportunities within India, particularly for EVs and network infrastructure.
ADI’s semiconductor products are expected to integrate across various Tata Group applications, enhancing India’s capabilities in EVs, data networks, and more. The partnership will further accelerate India’s journey to become self-reliant in semiconductor production and a key player in the global supply chain.
Vincent Roche, CEO and Chairman of ADI emphasized the significance of this collaboration, highlighting the potential to combine ADI’s semiconductor expertise with Tata Group’s vision to develop cutting-edge technologies across industries, from EVs to next-generation network infrastructure.
N Chandrasekaran once again highlighted the importance of this investment, noting that the development of a prosperous semiconductor industry will not only serve India’s growing tech demand but also support global customers.
Thus, India’s first semiconductor fab represents a pivotal moment in enhancing the country’s industrial capabilities. This initiative further reduces reliance on imports. In conclusion, Tata Group’s substantial investments and strategic partnerships, especially with companies like PSMC and ADI, are driving India’s emergence as a key player in the global semiconductor landscape.