Tata Electronics plans to build two more fabs in Dholera

While Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) is the partner for the ₹91,000-crore first phase at Dholera, the group will take a call on the timing of the second and third fabs, and whether to go with PSMC or look at alternatives, one of the people said on the condition of anonymity.

The next phase will likely begin in five to seven years, while the first fab is expected to start producing chips by 2026.

The two more fabs being planned “will be of the same scale as the first one", said the person. “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," the person said.

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At present, foundation work is on for the first fab, said a senior government official, who also requested anonymity. The company broke ground at the site in the Dholera Special Investment Region in March.

Tata Electronics is deciding on the installation capacity needed to test the equipment and construct the pilot line before producing from this line for commercial purposes.

The fab will produce chips used for making power management circuits, display drivers, microcontrollers (MCU) and high-performance computing logic used in a variety of sectors, including automotive, computing, data storage, wireless communication and artificial intelligence (AI). At peak capacity, the first fab will have a manufacturing capacity of up to 50,000 wafers a month.

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Since the fab will be making chips of different nodes, some of the infrastructure could be common to all three fabs and may be constructed in the first phase itself, the first executive said. Therefore, additional investment for the next phases may not be equivalent to the multi-billion dollars for the first fab but would still be substantial, the executive said.

Tata Electronics is closing in on buyers for the chips from the first fab, and these are likely to include companies from within the group such as Tata Motors, Tata Play and Tata Teleservices, that are large consumers of integrated chips.

Residential facility

It is also building a residential facility for about 4,000-5,000 people who will work at the first fab in Dholera. Tata Electronics is also in talks with suppliers and partners to build local ancillaries to create a supply-chain ecosystem for semiconductor fabrication or chip manufacturing.

Queries emailed to Tata Electronics remained unanswered as of press time Sunday evening.

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According to a senior industry executive, suppliers in the semiconductor ecosystem would be enticed by not only the massive plans Tata group has, including its own ₹27,000 crore assembly and testing unit coming up in Jagiroad, Assam, but also by other companies such as CG Power-Renesas and Kaynes Technology that are building such units in different parts of the country. “Many of these suppliers were part of the Semicon India last week," he said.

Tata’s Assam unit, where ground-breaking took place last month, is currently assessing environment impact, having finished the preliminary topographical survey, water analysis, flood risk assessment and environment monitoring. According to a presentation by the company at Semicon India, the unit housed in the 600-acre campus will be ready for high-volume manufacturing in the second half of 2025 with a per day capacity of 48 million chips. The facility includes a planned factory space of 100 acres with a clean-room facility of 1 million square feet.

This facility will focus on three key technologies—wire bond, flip chip, and a differentiated offering called Integrated Systems Packaging (ISP)—with plans of expanding the road map to advanced packaging technologies.