Tata Electronics is to develop two new semiconductor fabs in Dholera, Gujarat, as part of a long-term strategy to make chips locally and meet worldwide demand, according to two people familiar with the company's plans. 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, according to one person who spoke on the condition of anonymity.

The second phase is planned to begin within five to seven years, with the first fab generating chips by 2026. The individual stated that the two other fabs planned "will be of the same scale as the first one." "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," a source told me. A senior government official, who also requested anonymity, stated that foundation construction for the first fab is underway. In March, the business broke ground on the facility in Dholera Special Investment Region.

Tata Electronics is determining the installation capacity required to test the equipment and build the pilot line before producing from this line for commercial use. The facility will manufacture chips for power management circuits, display drivers, microcontrollers (MCU), and high-performance computer logic used in a wide range of industries, including automotive, computing, data storage, wireless communication, and artificial intelligence (AI). At peak capacity, the first fab will produce up to 50,000 wafers each month.

While the fab will produce chips of various nodes, some infrastructure may be shared by all three fabs and built during the first phase, according to the first executive. As a result, extra investment in the subsequent phases may not be as large as the multibillion-dollar investment in the first fab, but it would still be significant, according to the executive. Tata Electronics is closing down on purchasers for the chips from the first fab, which are likely to include Tata Motors, Tata Play, and Tata Teleservices, all of whom are significant integrated chip consumers.