File picture of semiconductor equipment on display
| Photo Credit: Reuters

Tata Electronics, a wholly owned subsidiary of Tata Sons Pvt. Ltd, said it had completed the Definitive Agreement with Powerchip Semiconductor Manufacturing Corporation (PSMC) of Taiwan towards establishing semiconductor manufacturing facilities (aka fabs) in India.

As per the agreement, PSMC will provide design and construction support to build India’s first AI-enabled greenfield fab in Gujarat, license a broad portfolio of technologies and provide engineering support to successfully transfer licensed technologies to the Gujarat fab. 

 This fab will have manufacturing capacity of up to 50,000 wafers per month and will include next-generation factory automation capabilities deploying data analytics and machine learning to achieve industry-best factory efficiency. 

The new semiconductor fab will manufacture chips for applications such as power management IC, display drivers, microcontrollers (MCU) and high-performance computing logic, addressing the growing demand in markets such as AI, automotive, computing and data storage, and wireless communication, Tata Electronics said in a statement. 

With a total investment of up to ₹91,000 crores ($11 billion), the fab will create over 20,000 direct and indirect skilled jobs. 

With this fab, India for the first time will be able to address the growing chip demand of domestic and global customers. Tata Group’s multi-fab vision for Dholera is projected to create over 1,00,000 skilled jobs, the company said.

N. Chandrasekaran, Chairman, Tata Sons in a statement 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. It will position us to play a key role in the growing semiconductor market to serve global customers.”

Frank Huang, Chairman of Powerchip Group and CEO of PSMC, 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.”

“I strongly believe that our partnership will be foundational to the India-Taiwan collaboration in semiconductors and will inspire more commercial and strategic tie-ups between the two sides,” he said.

Tata Electronics said it has already engaged two design firms from Taiwan to create a top-tier fab that adheres to global standards of quality, safety, and sustainability.