The Tata Group is in search of a Taiwanese partner for its semiconductor plant in Dholera.

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The Tata Group is in search of a Taiwanese partner for its semiconductor plant in Dholera.

The Tata Group is seeking a Taiwanese partner, potentially from either Powerchip Semiconductor Manufacturing Corporation (PSMC) or UMC Group, for its proposed semiconductor fabrication plant in Dholera, Gujarat. According to sources familiar with the matter, Tata aims to produce 65 nm chips initially, followed by advancements to 48 nm and eventually 28 nm, catering to applications ranging from graphic processor units (GPUs) to consumer electronics and the Internet of Things. The group has finalized the details for the plant’s land and is expected to commence construction soon, with an initial capacity of 25,000 wafers per month.

The plant’s estimated output translates to 700-1,000 semiconductor chips per day under full efficiency. Tata Sons Chairman N Chandrasekaran announced the semiconductor fab during an investment summit in Gujarat, with operations set to begin in 2024, marking a significant milestone as the first major chipmaking facility established by an Indian conglomerate. Tata seeks a strong technology partner with licensed semiconductor manufacturing technology to support this ambitious project. Government subsidies under the India Semiconductor Mission, offering approximately 50% capital incentives by the Centre and an additional 15-25% by states, will also be crucial.

While Powerchip Semiconductor Manufacturing Corporation (PSMC) and Tata Group did not respond to queries, a spokesperson for UMC stated that they do not comment on market speculations. The substantial investment required for a semiconductor plant, ranging from $5-10 billion, underscores the importance of securing a technology partner and government support.

The Tata Group’s proposal is one of the two strong proposals currently with the government, the other being Israel’s Tower Semiconductor, intending to invest close to $9 billion in India. The expertise of potential Taiwanese partners, UMC and PSMC, is highlighted, with UMC being the world’s second-largest foundry and PSMC, the seventh-largest pure-play foundry.

The Tata Group’s plans to venture into the fabrication of 28-nm chips may take time as they ensure sufficient demand for mature nodes like 65 nm and 48 nm in the domestic market. Additionally, the group may soon announce the establishment of an outsourced semiconductor assembly testing (OSAT) unit in Jagiroad, Assam, with a planned outlay of approximately Rs 25,000 crore. For the OSAT unit, Tata may seek a knowledge partner as it does not require cutting-edge technology.

Tata Electronics, spearheading the conglomerate’s electronics manufacturing initiatives, has made strategic hires, including the appointment of Randhir Thakur as CEO and Srinivas Satya as Chief Supply Chain Officer and President of the Components Business. The company’s diverse ambitions in electronics manufacturing range from being shortlisted by Apple as a vendor to expanding its iPhone-casing unit in Hosur and acquiring Wistron’s iPhone assembly plant in Karnataka, highlighting Tata’s significant presence and expansion plans in the electronics manufacturing space.

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