Tata Sons: Going 'FAB' With Semiconductors Tata Electronics will be setting up a fab in Dholera, Gujarat, as well as an ATMP facility in Assam
By Shrabona Ghosh •
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In a significant step towards creating an indigenous semiconductor ecosystem in India, the Centre has approved Tata Electronics Private Limited (wholly owned subsidiary of Tata Sons Pvt. Ltd.) proposal to set up a semiconductor fab in partnership with Powerchip Semiconductor Manufacturing Corp (PSMC), Taiwan. This fab will be constructed in Dholera, Gujarat, with an investment of INR 91,000 crore. PSMC is renowned for its expertise in logic and memory foundry segments and has six semiconductor foundries in Taiwan. The fab will have a manufacturing capacity of 50,000 wafer starts per month (WSPM). The investment will generate over 20,000 direct and indirect skilled jobs in the region. With this announcement, Tata Electronics enters the global semiconductor industry.
N Chandrasekaran, Chairman, Tata Sons had announced Tata Group's decision to build a semiconductor fab in Dholera in the 20th Vibrant Gujarat Summit in January 2024. "Tata Group has a tradition of pioneering many sectors in the country, and we are confident that our entry in semiconductor fabrication will add to this legacy. With AI-led digitization of every aspect of human existence, semiconductors will be the most crucial building block. By 2030, Global semiconductor industry is expected to grow to US$ 1 trillion and Indian semiconductor demand is expected to cross US$110bn. India's entry in semiconductor manufacturing will significantly de-risk global supply chains and will make India a very important player in the global semiconductor industry," the chairman said.
The semiconductor fab manufacturing is critical for India for two major reasons: ecosystem development and supply chain resiliency. However, semiconductor fab manufacturing is highly capital intensive requiring long gestation periods. Establishing a wafer manufacturing (front end fab) requires investments up to $10 billion while an ATMP facility requires investments in the range of $2-3 billion.
Centre also approved a proposal by Tata Electronics to build a state-of-the-art, greenfield semiconductor assembly and test facility in Jagiroad, Assam. The facility will be built with an investment outlay of INR 27,000 crore and is expected to generate over 27,000 direct and indirect jobs in the region. This facility will focus on three key platform technologies - Wire Bond, Flip Chip, and a differentiated offering called Integrated Systems Packaging (ISP), with plans of expanding the roadmap to advanced packaging technologies in the future. These technologies are extremely crucial for key applications in India – like automotive (especially electric vehicles), communications, network infrastructure and others. Tata Electronics has already made significant investments in indigenous technology development for all these platforms. The proposed facility will serve the growing global demands across key market segments like AI, industrial, and consumer electronics.
The construction of the facility is scheduled to start this year with the first phase of the facility becoming operational by mid-2025 and will provide an immense boost to industrialization in North-East India. The project is envisioned under the Government of India's Semiconductor policy being driven by the India Semiconductor Mission and the Government of Assam's Electronics policy.
Semiconductor assembly and test is a critical part of the semiconductor value chain where wafers manufactured by semiconductor fabs are assembled or packaged and then tested before they are finally used in the desired product. Innovations in semiconductor assembly and test are driving increased performance, reduced form factor, and reduced costs of semiconductor chips.
The semiconductor industry comprises companies that design, fabricate, assemble, test, and supply semiconductors that are suitable for various applications. While India has been strong in design, the country would be making strides in fab manufacturing. In December 2021, the Indian government earmarked INR 2,30,000 crore to position India as global hub for electronics manufacturing with semiconductors as the foundational building block. An outlay of INR 76,000 crore was allocated for the development of semiconductors and display manufacturing ecosystem in India.
The government's PLI scheme has attracted major investments in the semiconductor manufacturing value chain which are expected to significantly increase India's semiconductor manufacturing capacity in the coming years.
