India Inches Closer To Getting Its First Semiconductor Fab Unit

Tata Electronics on Thursday (September 26) said that it has signed a definitive agreement with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) to establish its first semiconductor fab unit in Gujarat’s Dholera.

Under the agreement, PSMC will provide design and construction support to build the AI-enabled greenfield plant in Gujarat. The Taiwanese electronics manufacturing giant will also license a broad portfolio of technologies and offer engineering support to Tata Electronics’ unit in Gujarat.

In a statement, Tata Electronics also said that PSMC will “bring to India” a portfolio of “cutting-edge semiconductor technologies, advanced skill set and talent, and a network of semiconductor manufacturing suppliers and ecosystem partners, setting the foundation for an indigenous semiconductor ecosystem in India”.

The upcoming semiconductor fab will manufacture chips for applications such as power management IC, display drivers, microcontrollers (MCU) and high-performance computing logic.

The company said that the proposed unit will cater to markets such as AI, automotive, computing and data storage, and wireless communication.

N Chandrasekaran, chairman at Tata Sons said, “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.” 

The conglomerate’ semiconductor arm also confirmed that the manufacturing unit will create over 20,000 direct and indirect skilled jobs. Also, its “multi-fab vision” for Dholera is projected to create over 1 Lakh skilled jobs, added the company.

Chiming in, PSMC CEO Frank Huang said, “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.”

The finalisation of the agreement comes nearly seven months after the Union Cabinet, in later February, approved the country’s first semiconductor fab to be set up by the Tata Group in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC).

Tata Electronics, throughout the year, has signed agreements and formed partnerships with various companies across the globe to build India’s first semiconductor fabrication plant. It has already “engaged” two esteemed design firms from Taiwan to create the fab unit at Dholera. 

Recently, Tata Electronics signed a memorandum of understanding (MoU) with Tokyo Electron Limited (TEL) for semiconductor equipment infrastructure. Prior to that, the company also signed an MoU with US-based Synopsys to accelerate production at the fabrication unit, in June.