In a bold move to secure India’s place in the global semiconductor race, Tata Electronics has partnered with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) to build the country’s first advanced chip-making facility.
The $11 billion investment will bring cutting-edge semiconductor manufacturing to Dholera, Gujarat, marking a significant step toward self-reliance in a sector critical to everything from AI to automotive technology. As global chip demand surges, this deal positions India as a rising player in an industry long dominated by East Asia and the U.S.
The development came soon after PSMC reportedly pulled out of plans for a Japanese chip plant, shifting its focus to a technology partnership in India that will put less strain on its finances.
India’s first 12-inch wafer factory
The definitive agreement between Taiwan-based PSMC and Indian tech manufacturer Tata Electronics in New Delhi will see the construction of India’s first 12-inch wafer fab, to be situated in Dholera, Gujarat. The partnership includes transferring mature process technologies and training Indian employees.
“With a total investment of up to INR 91,000 crores (~US$11bn), the Fab will create over 20,000 direct and indirect skilled jobs. With this Fab, India for the first time will be able to address the growing chip demand of domestic and global customers,” according to the official statement. Tata Group’s multi-fab is projected to create over 1,00,000 skilled jobs.
Key Points
- Tata Electronics and PSMC have signed a deal to build India’s first semiconductor fabrication plant (fab or foundry).
- The project, with a $11 billion investment, aims to produce 50,000 wafers per month.
- The facility will focus on chips for sectors like AI, automotive, and wireless communication.
- The fab will employ advanced data analytics and machine learning to optimize factory efficiency and sustainability.
- The factory will manufacture chips for applications such as power management IC, display drivers, microcontrollers (MCU) and high-performance computing logic, addressing the growing demand for AI, computing and data storage.
- The fab aims to boost India’s role in the global semiconductor market, creating over 100,000 skilled jobs in the coming years.
Game-changing Partnership
The Tata Electronics-PSMC collaboration marks a significant milestone in India’s semiconductor ambitions. PSMC, one of the world’s largest semiconductor foundries, will provide design, construction, and engineering expertise to establish the state-of-the-art fab in Dholera, Gujarat. Tata Electronics — a wholly-owned subsidiary of Tata Sons Pvt. Ltd — is a pioneer in India‘s electronics manufacturing sector,
N. Chandrasekaran, Chairman of Tata Sons, hailed the collaboration, saying, “This collaboration is a key milestone, and 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.”
On September 26, 2024, Huang Chongren, Chairman of Power Semiconductor Manufacturing Company, along with Zhu Xianguo, visited Indian Prime Minister Narendra Modi at the Prime Minister’s Office following the signing ceremony.
Huang emphasized the importance of a business-friendly environment for Taiwanese companies and urged the Indian government to safeguard Taiwanese investments, highlighting the vast opportunities in India’s market and talent pool. He also expressed optimism about future collaborations between Taiwan and India in the chip design industry. In response, Prime Minister Modi reaffirmed the government’s full support for the joint 12-inch wafer fab project with Tata Electronics and welcomed Taiwan’s active role in India’s growing semiconductor sector, assuring assistance for further Taiwanese investments.
Plans for India’s semiconductor future
This move aligns with Tata Group’s broader goal to invest $90 billion over the next five years in domestic chip production. The company’s focus is on helping India become a significant player in the global semiconductor supply chain, meeting both domestic and international demand.
Dr Frank Huang, Chairman of PSMC, expressed optimism about the partnership, stating, “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.”
He hoped the partnership would catalyze India’s semiconductor landscape and will inspire collaboration in semiconductors and more commercial and strategic tech ventures between Taiwan and India.
