After years of unsuccessful attempts by various players to establish semiconductor fabrication in India, it seems the tide is finally turning: Tata Electronics Private Limited (est. 2020) has started investments in four manufacturing facilities spread across India. There’s also the China + 1 strategy at play here, where countries are trying to reduce dependence on a single country.
The largest of these four Tata Electronics factories is a $10.9 billion (INR 91,000 crore) investment to build a semiconductor fabrication facility at Dholera, Gujarat. The project received approval in February 2024, with chip production expected to commence within two years. Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) is the technology and execution support partner. This facility will do 12-inch wafer fabrication, for chips with node sizes of 28nm, 40nm, 55nm, 90nm, and 110nm. These chips can be used for applications ranging from power management ICs, display drivers, microcontrollers, and high-performance computing.
I started writing this blog because I was excited to hear a new development from Tata Electronics two days back, as they laid the foundation stone for another project, this time in Assam. The planned investment for this facility is USD 3.25 Bn (INR 27,000 Crore). This facility will be focusing on chip packaging in three key areas – Wire Bond, Flip Chip, and Integrated Systems Packaging (ISP).
Previously, in November 2023 Tata Electronics acquired Wistron’s iPhone assembly facility at Kolar, Karnataka for $125 million (INR 1,000 crore). Wistron started this plant in 2017 and decided to exit because the venture couldn’t become profitable and also due to a large employee strike over salaries (damages from the strike cost Wistron several crore rupees in losses).
The company also has a plant near Hosur, Tamil Nadu, which they plan to expand with an additional investment of USD 835 Mn (INR 7000).
Tata Electronics already employs 15,000 people, primarily in their Karnataka and Tamil Nadu facilities. They expect to generate approximately 100,000 jobs in Gujarat, 27,000 in Assam, and 10,000 in Tamil Nadu (this includes direct and indirect employment).
Of course, such heavy investments were only possible by one of the bigger Indian conglomerates. The Tata Group has its huge revenues and operations in other sectors to back this project up. in 2022-23 the group’s ventures collectively generated $150 billion (INR 12 Lakh Crores) in revenues. They employ over 1 Mn people and the 29 publicly listed Tata companies have a combined market capitalization of $350Bn.
(P.S. Rounded off the conversions/numbers for readability)
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