Tata Electronics Begins Construction of India’s First Semiconductor Fab

The foundation stone for India’s first semiconductor fab, to be built by Tata Electronics in collaboration with Taiwanese firm Powerchip Semiconductor Manufacturing Corporation (PSMC) in Dholera Gujarat, has been laid. The facility is described as a state-of-the-art, AI-enabled fab, and Tata will manufacture microchips for in-demand sectors such as automotive, AI, data storage, and wireless communication. Operations should commence in 2026, and the target manufacturing capacity is 50,000 wafers per month. Over 20,000 skilled jobs are expected to be created in the region. 

The government of India had approved Tata Electronics’ Rs. 91,000 crore bid to construct the semiconductor fab in late February, after having invited proposals to kickstart a Make in India ecosystem for semiconductors. The plant is expected to produce chips which will be used for domestic industry as well as for export. According to the Tata Group, the plant will use next-generation factory automation tools and machine learning to achieve factory efficiency.  

Tata's partnership with PSMC gives it access to technology to enable semiconductor fabrication at transistor sizes ranging from 110nm to 28nm, which are considered mature nodes.

Simultaneously, Tata Electronics is developing a semiconductor assembly and testing facility at Jagiroad, Assam, at a cost of Rs. 27,000 crore. This will form another part of the semiconductor manufacturing value chain, focusing on wire bond, flip chip and integrated systems packaging, as chips are readied for use in various industries. This facility is expected to create over 27,000 direct and indirect jobs. 

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In a statement, N Chandrasekaran, Chairman, Tata Sons, said “Today, is indeed a special day for the Tata group – with the foundation stone being laid simultaneously for our projects in Dholera and Jagiroad 2,500 km apart. These semiconductor manufacturing hubs will have a lasting impact on the entire nation. The ecosystem from across the globe will mobilise to have India as their preferred semiconductor destination.”

Together, the two facilities give the Tata Group a portfolio of offerings across the semiconductor manufacturing process, and contribute to a new industry within India. This has the potential to create jobs and put India on the global supply chain map, especially as companies across the world look to diversify sourcing to mitigate risk. Domestic semiconductor demand alone is projected to reach $110 billion by 2030, according to Tata Electronics.