Tata plans two more wafer fabs for Gujarat site, says report
Tata Electronics is planning to build two additional wafer fabs in Dholera, Gujarat, after it brings its first wafer processing facility into production in 2026, according to a local report that referenced unnamed sources.
Tata is partnered with Powerchip Semiconductor Manufacturing Corp. (PSMC) for the first wafer fab in Dholera, which was tagged as a US$11 billion project. However, PSMC is not yet committed to the second and third phases which are scheduled to start manufacturing in about five- and seven-years’ time.
It is not clear whether other partners for the follow-on fabs would be necessary once Tata has started manufacturing and avoided patent infringement claims. However, Tata may choose to share capital cost with key customers. Similarly, while the Indian authorities have committed to providing 70 percent subsidy to Tata Electronics for the first tranche of spending, that is likely to be reduced for subsequent fabs.
With a manufacturing capacity of up to 50,000 wafers per month the first fab is expected to be able to provide power management ICs, display drivers, microcontrollers (MCU), computing logic in support of automotive, computing and data storage, wireless communication and artificial intelligence applications.
The second and third plants would be at a similar size, the report said.
However, observers had previously questioned the US$11 billion project price tag allowing the possibility that Tata was already factoring in second and third modules able to share infrastructure. It was also revealed in the Mint article that Tata is building a residential facility for between 4,000 and 5,000 people to accommodate workers.
For the second and third fabs, “the nodes and technology will be decided once the first fab is at full capacity and will depend on the global demand and technology development within the semiconductor industry,” an unnamed source was quoted saying.
What about the oversupply?
However, the Indian investment comes alongside even larger investment in mature-node manufacturing by China. The combination risks creating a massive over-supply that could collapse the market. The only types of chips that cold avoid the market turmoil would be those made with leading-edge manufacturing processes – memories and high-performance computing and AI processors.
The report said the company is negotiating with buyers for chips to be produced from the first fab. Tata Motors, Tata Play and Tata Teleservices and all said to be likely to buy from Tata Electronics. Tesla is another automotive maker signed up.
Tata Electronics is also being subsidized by the Indian government to build a test and packaging facility in Jagiroad, Assam for about US$3.25 billion. That is expected to create over 27,000 direct and indirect jobs. The facility will support wire-bond, flip-chip, and integrated systems packaging (ISP) and is expected to start operations late in 2025 or early in 2026.
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