In Short:
Prime Minister Narendra Modi met with Tata Sons and Powerchip Semiconductor (PSMC) leaders to discuss a major semiconductor agreement. PSMC plans to build India’s first AI-enabled semiconductor factory in Gujarat, aiming to reduce import reliance. This partnership will create over 20,000 jobs and strengthen India’s tech capacity, supporting sectors like AI and automotive. Tata’s efforts include training 400 skilled employees for chip manufacturing.
Investment in Semiconductor Production
Frank Huang, chairman of the Taiwanese company Powerchip Semiconductor Manufacturing Corporation (PSMC), stated, “India has the promise to be a hi-tech producer of semiconductors and reduce the country’s dependency on imports on the back of growing demand for more electronics and hi-tech products.” Huang made these remarks during his visit to India, where he signed a definitive agreement with the Tata Group.
Collaboration Benefits
Huang confirmed that the agreement aligns with Indian Prime Minister Narendra Modi‘s vision of making India semiconductor-ready. He noted that PSMC‘s largest semiconductor capacities are in Taiwan, and India will become a significant supplier in their global chain.
He emphasized the compatibility of PSMC and the Tata Group, stating, “Most semiconductor giants rarely license their technology. In terms of cost structure, capabilities, and government support, India and Tata are the perfect fit for us.”
Partnership Development
Following direct inquiries from the Prime Minister’s Office in February, PSMC sought a suitable partner in India. Huang explained, “We had several rounds of discussions with many potential companies, but we found an ideal partner in Tata.” As part of the collaboration, PSMC will assist in designing and constructing India’s first AI-enabled state-of-the-art greenfield Fab in Gujarat. They will also license a variety of technologies and provide the necessary engineering support for the successful technology transfer.
Future Vision
N Chandrasekaran, chairman of Tata Sons, remarked on the significance of semiconductors for future advancements, praising the decisive leadership of Prime Minister Modi in establishing this partnership. He stated that this collaboration with PSMC will foster innovation, drive growth, and reinforce the global semiconductor supply chain.
Job Creation and Skill Development
Tata Electronics has initiated extensive training programs, having already prepared 400 employees with plans for more specialized training sessions in Taiwan, recognizing that chip manufacturing requires highly specialized skills. With a total investment of up to INR 91,000 crores (approximately US$11 billion), the Fab is anticipated to generate over 20,000 direct and indirect skilled jobs. The multi-fab vision for Dholera is expected to create over 100,000 skilled jobs in total.
Market Applications
The upcoming semiconductor Fab will focus on manufacturing chips for a variety of applications, including power management ICs, display drivers, and microcontrollers (MCUs), catering to the escalating demand in sectors such as AI, automotive, computing, data storage, and wireless communication.
Tata Electronics has begun engaging potential buyers for the chips produced at the Dholera Fab, including Tata Motors and Tata Teleservices, both of which require integrated circuits. The Tata Group is also taking steps to build a robust supply chain ecosystem by collaborating with suppliers and partners to create local ancillary units around their manufacturing sites, as per official statements.
