Indias semiconductor industry gets boost from Tata-ASML partnership agreement

India’s Tata Electronics has signed a deal with Dutch technology giant ASML to build India’s first front-end semiconductor fabrication plant. The agreement marks a significant step in New Delhi’s efforts to develop a domestic semiconductor manufacturing base.

Under the terms of the deal, ASML will supply advanced lithography technology to Tata Electronics for the manufacture of 300mm wafers. Tata Electronics plans to invest $11 billion to build the plant in Dholera, Gujarat, with production expected to begin by 2028.

The agreement is part of India’s broader efforts to increase its presence in the global semiconductor industry. ASML will provide Tata Electronics with a suite of lithography tools and solutions to support the establishment and ramp-up of the new facility.

Tata Electronics has partnered with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) to set up the plant, which will produce chips for various sectors, including automotive manufacturing, mobile devices, and AI applications. The company is also a major player in the production of memory chips.

The agreement reflects India’s ambition to enter a sector dominated by a handful of global powers. ASML CEO Christophe Fouquet stated that “India’s rapidly expanding semiconductor sector represents many compelling opportunities” for collaboration.

The deal marks an important milestone in India’s efforts to reduce its reliance on imported microchips, which are currently the bulk of the country’s imports. The government has set ambitious targets for domestic chip production, with plans to produce advanced chips such as sub-7 nanometre (nm) devices for AI and smartphones.

The agreement is part of a broader trend of India partnering with international companies to develop its semiconductor ecosystem. In recent years, India has seen increased trade in technology and AI with Taiwan, reaching $10 billion in 2024.

Source: Al Jazeera