Tata Electronics In Talks To Onboard NXP For Its Fab Plant

Tata Electronics is reportedly in discussions to onboard semiconductor design major NXP Semiconductors as its key customer.

The partnership will lead Tata Electronics to manufacture NXP’s offerings in its upcoming semiconductor fab plant in Gujarat and outsourced semiconductor assembly and test (OSAT) facility in Assam, ET reported, citing sources familiar with the matter.

One of the sources also confirmed that the deal is expected to mirror Tata Electronics’ last partnership with US-based semiconductor manufacturing company Analog Devices, where it is looking to start production of chips by 2026.

In September last year, Tata Electronics, Tata Motors and Tejas Networks signed a memorandum of understanding (MoU) with Analog Devices to explore joint opportunities in semiconductor manufacturing in India.

Back then, the Tata Group-owned company agreed to manufacture Analog Devices’ products in its upcoming semiconductor fab plant in Gujarat as well as in its OSAT facility in Assam.

Notably, Tata’s fab and OSAT facilities are expected to support legacy-node chips, which remain critical for automotive electronic control units (ECUs) and specialised vehicle computers. 

While companies like NXP have their own fabs, they tend to outsource some of their production, and that is where the Tata fab and OSAT could fit in, the report said.

“They do a lot of analog chips and many of the industrial and security chips do not need the latest technology. There is also a case being made for supply chain resilience, which are all some of the reasons driving the dialogue with Tata Electronics,” a source was quoted as saying in the report.

“In the advanced node, there isn’t much of an option, but in the mature nodes, companies like NXP would see a benefit in bringing in players like Tata Electronics,” the source added.

Other Deals Signed For Semiconductor Chip Production

The development comes at a time when the company has been on the sprint of acquiring more deals to commence the operations of its semiconductor factory in Gujarat, in recent months.

Only weeks ago, EV major Tesla inked a strategic deal with Tata Electronics to acquire semiconductor chips for its global operations.

Prior to that, Tata Electronics signed an MoU with Taiwanese semiconductor manufacturers Himax Technologies and Powerchip Semiconductor Manufacturing Corporation (PSMC) to develop display semiconductors, in March.

Meanwhile, in December last year, NXP committed to invest a portion of its INR 8,400 Cr (around $1 Bn) research and development (R&D) fund in Bengaluru over the next five years.