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

What Happened: The conglomerate aims to initially manufacture mature nodes of 65 nanometres before advancing to 48 nanometres and then to 28 nanometres, supporting various applications from graphic processor units (GPU) to consumer electronics and the Internet of things, Economic Times reported, citing sources.

One source told the business daily that the Tata Group has finalised the land details for the plant and is expected to commence construction soon.

The initial capacity of the plant is estimated at 25,000 wafers per month, translating to approximately 700-1,000 semiconductor chips daily at full operational efficiency, the sources added.

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Big Plans: In January, Tata Sons Chairman N Chandrasekaran announced plans for a significant semiconductor factory in Dholera during an investment summit in Gujarat, scheduled to commence operations in 2024, marking a significant milestone as the first major chipmaking plant by an Indian conglomerate.

Government subsidies under the India Semiconductor Mission, offering nearly 50% subsidy on capital incentives by the Centre and an additional 15%-25% by the states, could help Tata’s chipmaking plans.

Semiconductor plant investments typically range between $5 billion-$10 billion (₹41,500 crore-₹83,000 crore).

Competition: Meanwhile, the Tata Group’s proposal is one of two strong contenders with the government presently, the other being Israel’s Tower Semiconductor, aiming to invest close to $9 billion (₹74,666 crore) in India.

However, the Tata Group’s plans to enter 28-nanometre chip fabrication are expected to take time as it ensures sufficient uptake for mature nodes like 65 nanometres and 48 nanometres in the domestic market.

In addition to the chip fabrication unit, the Tata Group may soon unveil plans for an outsourced semiconductor assembly testing (OSAT) unit in Jagiroad, Assam, with an estimated outlay of nearly ₹25,000 crore.

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