According to sources, India’s Tata group is in negotiations with three states to invest up to $300 million in establishing a semiconductor assembly and testing facility as part of the conglomerate’s drive into high-tech manufacturing.
According to sources who declined to be identified since the topic is private, Tata is in talks with the southern states of Tamil Nadu, Karnataka, and Telangana about locating an outsourced semiconductor assembly and test (OSAT) factory.
While Tata has previously stated that it intends to join the semiconductor market, this is the first time that information on the group’s entry into the sector and its magnitude has been made public.
An OSAT factory package assembles and tests silicon wafers manufactured by foundries, transforming them into completed semiconductor chips.
According to one of the individuals, Tata has looked at some potential locations for the manufacturing, with a decision expected next month.
“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,” the source said.
Requests for comment from the Tata group and the three states were not returned.
Tata’s move will bolster Indian Prime Minister Narendra Modi’s ‘Make in India’ electronics manufacturing initiative, which has already helped India become the world’s second-largest smartphone manufacturer.
According to its Chairman N. Chandrasekaran, the Tata group, which owns India’s leading software services exporter Tata Consultancy Services and has holdings in everything from cars to aviation, aims to expand in high-end electronics and digital industries.
Intel, Advanced Micro Devices (AMD), and STMicroelectronics are all potential clients for Tata’s OSAT business.
The facility is planned to open late next year and might employ up to 4,000 people, according to the source, who added that the project’s long-term viability depends on the availability of competent labor at a reasonable cost.
Separately, Tata is already building a high-tech electronics manufacturing facility in southern Tamil Nadu state.