Tata begins building $3.2bn semiconductor plant as India gears up for chip battle

Tata Electronics has started the construction of its RS 27,000-crore chip (USD 3.2 billion) assembly plant in India that will produce more than 48 million chips per day using indigenously developed technologies.

The project in the eastern Assam state is expected to become operational in 2025 and create 27,000 jobs initially.

The plant’s foundation stone laying ceremony was held at the project site in Jagiroad, Assam, this month. 

“At its capacity, it will employ 27,000 people, 15,000 direct jobs and additional 12,000 indirect jobs. We want to move fast. We are trying to accelerate the building of this factory. We hope sometime in 2025 we will be able to complete this facility and quickly start operations,” said Tata Sons Chairman N Chandrasekaran  

The project was approved by the central government in February.

Ashwini Vaishnaw, the central government minister in charge of Electronics and Information Technology, said the chips manufactured at the Tata plant would be used by a range of companies in different sectors, including electric vehicle makers.  

“Semiconductor is a foundational industry. Whenever a semiconductor unit comes there will be many more downstream employment which will get created and there will be many more upstream, because the ecosystem is so complex that a lot many units come the moment a mother unit comes,” Ashwini Vaishnaw said.

Tata Electronics (together with Taiwan’s PSMC) is also setting up the country’s first wafer fabrication unit in Dholera, Gujarat. That plant with a capacity to produce 50,000 wafers per month involves an investment of RS 91,000 crore (USD 10.8 billion). The first chips from the Dholera plant are expected to be out in December 2026.

The Assam and Dholera plants are two of the three semiconductor proposals for semiconductor plants approved by the Indian government in February at an estimated cost of Rs 1.26 lakh crore (USD 15 billion). The third plant will also come up in Gujarat.