Tata Group Weighs Options With Taiwanese Firms For Gujarat Chip Facility, Says Report

The Tata Group is considering partnerships with Taiwanese chip manufacturers for its Gujarat chip fabrication facility
Tata Group
Tata Group

The Tata Group is reportedly considering collaborations with one of the two leading Taiwanese chip manufacturers, Powerchip Semiconductor Manufacturing Corporation (PSMC) or UMC Group, for its planned chip fabrication facility in the state of Gujarat.

According to a report by the Economic Times, in the coming years, the Indian conglomerate plans to produce 65 nm (nanometer) mature nodes, and then transition the manufacturing process to 48 nm and eventually to 28 nm. These nodes support various applications such as graphic processor units (GPU), consumer electronics, and the Internet of things (IoT).

The plant's initial capacity is projected to be 25,000 wafers per month. As per sources cited in the report, this capacity could yield approximately 700-1,000 semiconductor chips per day if the unit operates at maximum efficiency. The success of Tata's ambitious project hinges on securing a strong technology partner equipped with licensed-grade semiconductor manufacturing technology. Moreover, the project will depend on government subsidies available through the India Semiconductor Mission, which provides close to 50 per cent subsidy on capital incentives from the Centre, coupled with an additional 15-25 per cent subsidy from the states.

Among the current proposals under consideration by the government, the Tata Group's proposal stands out as one of two 'strong' contenders. The other contender is Israel's Tower Semiconductor, which has proposed an investment of nearly $9 billion in India.

The investment needed for a semiconductor plant ranges from $5 to $10 billion.

While the Tata Group aims to enter the fabrication of 28-nm chips, this move is expected to be delayed as they focus on ensuring adequate demand for mature nodes like 65 nm and 48 nm within the domestic market sphere.

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