Tata Electronics plans to build both front-end semiconductor wafer fabrication and back-end packaging and test facilities in India, a big step toward the nation’s goal of establishing a competitive domestic semiconductor industry.
In collaboration with Taiwanese foundry Powerchip Semiconductor Manufacturing Corporation (PSMC), Tata Electronics plans to start construction of India’s first 300mm semiconductor wafer fab in the next few months.
The venture, announced on February 29, matches PSMC’s diversification out of Taiwan with Tata’s strategy of pioneering new industries in India.
Tata Electronics belongs to India’s Tata Group industrial conglomerate, the nation’s largest. PSMC is Taiwan’s third-largest and the world’s eighth-largest semiconductor foundry.
The new front-end facility will be located in Gujarat and capable of producing power management semiconductors, microcontrollers, display driver integrated circuits and other logic devices for the automotive (including electric vehicles), computing and data storage, telecommunications, consumer electronics and defense industries.
Process nodes are expected to range from 28nm to 110nm, covering a wide range of mature applications.
According to Tata, the fab will have a production capacity of up to 50,000 wafers per month and will be equipped with state-of-the-art factory automation technology including data analytics and machine learning.
While geared to serve domestic and international customers, the fab should increase manufacturing synergies within the Tata Group.
On February 29, the Indian government also announced approval of Tata Electronics’ plan to build a semiconductor assembly, packaging and test facility in Assam, in the country’s northeast. The factory will offer wire bond, flip chip and integrated systems packaging services for semiconductor devices for the same range of user industries.
Construction of the back-end facility in Assam is scheduled to begin this year, with the first phase of operations scheduled to begin in 2025. News reports suggest US tech giant Qualcomm could be one of its first customers.
“The strategy of serving across the semiconductor value chain is our differentiator and will enable Tata Electronics to deliver complete system offerings to customers,” said Randhir Thakur, CEO of Tata Electronics.
“We have a critical window of opportunity where we see tremendous customer pull from global players for manufacturing in India and we plan to capitalize on this opportunity and leapfrog through technology innovation,” he added. “This investment will go a long way in putting India on the map of global semiconductor manufacturing.”
Tata management expects India to account for at least 10% of worldwide semiconductor production by the end of the decade. India is responding to calls in the West and beyond for greater “supply chain resilience”, code for “de-risking” or “decoupling” from China.
The Indian government also approved a semiconductor assembly, packaging and test facility construction project led by India’s CG Power in cooperation with Japan’s Renesas Electronics and Thailand’s Star Microelectronics. Also located in Gujarat, the fab will also serve the auto, telecom, consumer electronics and other industries.
CG Power and Industrial Solutions is an engineering conglomerate headquartered in Mumbai that manufactures motors, drives, transformers, switchgears and other electrical equipment for Indian Railways and other industrial users.
Star Microelectronics, a provider of outsourced semiconductor assembly and test (OSAT) and electronic manufacturing services, will provide the venture with packaging technology, training and other support.
Renesas, Japan’s largest integrated semiconductor device maker, will bring its advanced semiconductor technology to the joint venture. Renesas also works with Tata Group companies Tata Motors and Tejas Networks.
In June 2023, Micron Technology put the Indian semiconductor industry in global headlines with plans to build a DRAM and NAND flash memory assembly and test facility in Gujarat. Phase 1 of the project is scheduled to become operational by the end of 2024. Phase 2 is likely to be completed in the second half of the decade.
Micron CEO Sanjay Mehrotra, who was born in India, moved to the US at the age of 18 to study electrical engineering and computer science at UC Berkeley. He was a co-founder and CEO of SanDisk before becoming the top executive at Micron.
All of these projects are eligible for Indian government support. In Micron’s case, 50% of the total cost (the maximum allowed) will be paid by the Indian central government and 20% by the state of Gujarat. Government entities will also facilitate access to infrastructure and qualified workers. Tens of thousands of jobs are likely to be created.
This is taking place in the context of the India Semiconductor Mission, a division of the Digital India Corporation established to promote the development of a semiconductor and display manufacturing ecosystem with the goal of turning India into a world-class center of electronics manufacturing and design.
Digital India Corporation was established by India’s Ministry of Electronics and Information Technology in 2013. Gujarat, the home state of Prime Minister Narendra Modi, has had its own semiconductor promotion policy since 2022.
In November, AMD opened its newest and largest design center in Bengaluru (Bangalore). In an interview with Computer Weekly, AMD CEO Mark Papermaster said, “We chose India to host our largest design facility because the local leadership team has demonstrated capability to hire great talent and deliver great results in product development across AMD’s portfolio.”
AMD, which competes with Intel in central processing units (CPUs) and Nvidia in graphics processing units (GPUs), has been doing business in India for almost two decades.
Over that period it was widely believed that while India could become a world leader in IC design, it likely wouldn’t have the capacity or wherewithal in the cutthroat business of chip manufacturing.
Now, with a strategy based on attracting foreign semiconductor makers to build factories in India and work hand-in-hand with leading Indian industrial firms, that narrative is changing.
Within a decade, India is likely to have a sizeable semiconductor industry, opening a new gamut of opportunities for local entrepreneurs. In contrast to China, it will most likely be thoroughly integrated and on good terms with its counterparts in the US, Japan and elsewhere.
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