Tata-NXP Fab Talks Signal Bold Leap in India’s Chip Race

According to reports, Tata Electronics is in talks to add NXP Semiconductors, a leading semiconductor design company, as a major client. Through their agreement, Tata will manufacture NXP's products at its outsourced semiconductor assembly and test (OSAT) facility in Assam and its future semiconductor fab factory in Gujarat.

According to one of the sources, the agreement is anticipated to replicate Tata Electronics' previous collaboration with Analogue Devices, a US-based semiconductor manufacturing company, where the company hopes to begin chip production by 2026.

In September of last year, Analogue Devices and Tata Electronics, Tata Motors, and Tejas Networks signed a memorandum of understanding (MoU) to investigate potential collaboration in semiconductor production in India.

 At that time, the Tata Group-owned company committed to producing Analogue Devices' goods at both its OSAT facility in Assam and its future semiconductor fabrication site in Gujarat.

Shifting Away from Taiwan

Even though businesses like NXP have their own factories, they frequently outsource some of their production, which is where OSAT and the Tata fab can be useful. A media article claims that businesses desire to have an alternative to depending entirely on companies like TSMC, a well-known Taiwanese semiconductor contract manufacturing and design firm.

 The research went on to say that while there aren't many options at the advanced node, businesses like NXP would profit from bringing in players like Tata Electronics in the mature nodes.

Neil Shah, vice president-research at Counterpoint Research, emphasised the Tata Group's long-standing partnership with NXP as the primary motivation for this action. NXP is a natural fit because of their existing business, particularly in automotive chips, and it only makes sense for Tata Electronics to talk to a number of potential customers and construct an India Rolodex for their forthcoming fab.

Tata’s Fab to be Operational Later this Year

Later this year, Tata's Dholera factory, which can produce 50,000 wafer starts each month, is anticipated to be operational.

In addition to power management chips for electric cars, telecom, defence, automotive, consumer electronics, display, and power electronics, the facility will manufacture high-performance computation chips using 28 nm technology.

Applications for power management chips involve high voltage and high current. With a daily capacity of 48 million, Tata Semiconductor Assembly and Test (TSAT) at Morigaon, Assam, is creating domestic advanced semiconductor packaging technologies, such as flip chip and integrated system in package technologies.

Mobile phones, consumer electronics, telecom, electric vehicles, and automobiles are among the markets it will serve. In September of last year, Tata Electronics and ADI inked a memorandum of understanding (MoU) to investigate contract manufacture of the latter's products in India.