Tata Group On Partnership Lookout For Dholera Plant, Could Be UMC Or PSMC

The plant will start with initial capacity of 25,000 wafers per month, to 700-1,000 semiconductor chips per day at full efficiency.

The Tata Group is considering partnerships with either Powerchip Semiconductor Manufacturing Corporation (PSMC) or UMC Group, two major Taiwanese chipmakers, for its planned chip fabrication plant in Dholera, Gujarat. 

The Indian conglomerate aims to start with manufacturing 65 nm mature nodes, before progressing to 48 nm and then 28 nm, which are used in a variety of applications including GPUs, consumer electronics, and IoT devices. The plant is expected to have an initial capacity of 25,000 wafers per month, which could translate to 700-1,000 semiconductor chips per day at full efficiency.

This will  be the first major chip making plant established by an Indian conglomerate. The success of Tata’s ambitious project is contingent on securing a strong technology partner with license-grade semiconductor manufacturing technology and obtaining government subsidies under the India Semiconductor Mission. 

The mission offers nearly 50% subsidy on capital incentives from the central government and an additional 15-25% from state governments. A semiconductor plant typically requires an investment of $5-10 billion.

The Tata Group’s proposal is one of two strong proposals currently under consideration by the government, with the other being from Israel’s Tower Semiconductor, which plans to invest around $9 billion in India.

UMC, founded in 1980 as Taiwan’s first semiconductor company, is the world’s second-largest foundry with a reported consolidated revenue of NT$222.53 billion in 2023. PSMC, the seventh-largest pure play foundry, announced a $5.3 billion chip manufacturing plant in Japan last October and reported net sales of NT$3.429 billion in 2023. Both companies are headquartered in Hsinchu, Taiwan.

The Tata Group’s entry into 28-nm chip fabrication may take some time as it aims to ensure sufficient domestic demand for mature nodes (65 nm and 48 nm). The group is also planning to establish an outsourced semiconductor assembly testing (OSAT) unit in Jagiroad, Assam, with a total planned outlay of close to Rs 25,000 crore. The group may seek a ‘knowledge partner’ for the OSAT unit, as it does not require highly advanced technology.