Tata Group Is Looking For Land To Build $300 Million Semiconductor Plant

Due to worldwide microchip shortages, numerous companies have teamed up to share manufacturing facilities and transport this critical technology to phone manufacturers and those who assemble computers. Now, one of India's major corporations intends to get into the chip manufacturing field.

Tata group is reportedly in talks with three states to invest up to $300 million in a semiconductor assembly and test unit. These states include Telangana, Karnataka and Tamil Nadu, where the company is already constructing a high-tech electronics manufacturing facility.

According to a report by Reuters, Tata, which operates a variety of businesses ranging from cars and trucks to software, is searching the land for an outsourced semiconductor assembly and test (OSAT) plant in the southern states.

The Tata Group had already stated that it intends to develop global business through exports, and the current microprocessor and semiconductor shortage appears to have pushed them in that direction. Because these are important components in consumer electronics like smartphones and laptops, the company recognised an opportunity to broaden its current experience with developing hardware.

While the company has previously shared its intention to enter the semiconductor market, this is the first time information regarding the company's entry and scale has been made public.

A foundry-made silicon wafer is packaged, assembled and tested at an OSAT plant before being turned into finished semiconductor chips. According to one of the sources, Tata has looked at a number of potential locations for the unit, with a decision expected in December.

Additionally, the source said: "While they [Tata] are very strong on the software side of things... hardware is something they want to add to their portfolio, which is very critical for long-term growth."

Tata's move will boost Indian Prime Minister Narendra Modi's 'Make in India' initiative, especially in the field of electronic manufacturing. The initiative has already helped the country become the world's second-largest smartphone manufacturer.

As per Chairman N Chandrasekaran, the Tata group, which owns India's biggest software services exporter Tata Consultancy Services (TCS) and has holdings in everything from autos to aviation, aims to expand in high-end electronics and digital industries.

The report noted that Intel, Advanced Micro Devices, and STMicroelectronics are among the potential clients of Tata's OSAT business.

However, the facility is anticipated to open late in 2022 and may employ up to 4,000 people, according to the source, who added that the availability of competent labour at a reasonable price was key to the project's long-term survival.

One of the people familiar with the development said: "Once Tata starts, the ecosystem will come around... So it's very critical to find the right place from a labour standpoint."