Tokyo Electron Ltd to supply equipment to Tata Electronics, train workforce at India’s first fab

New Delhi: Japanese electronics and semiconductor company Tokyo Electron Ltd (TEL) on Monday agreed to supply equipment and train the employees of Tata Electronics, which is building India's first semiconductor fabrication (fab) facility in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corporation.

Tata Electronics is building the chip fabrication unit in Dholera, Gujarat, with a total investment of ₹91,000 crore. It will invest another ₹27,000 crore in a greenfield facility in Jagiroad, Assam, for assembly and testing of semiconductor chips. These facilities will produce semiconductor chips for applications across automotive, mobile devices, artificial intelligence (AI), and other key segments to serve customers globally.

In a statement announcing the partnership, Tata Electronics said that the alliance with TEL will be a critical pillar in achieving its execution targets. The company intends to begin producing chips from 2026.

"We have a bold vision of becoming a leader in electronics manufacturing by offering integrated solutions across the value chain to our global customers. TEL has a history of working closely with its customers, and its expertise in the semiconductor equipment space will help build a dynamic ecosystem to support the timely execution of bringing up our fab and advanced packaging factories. We are excited about the customer-centricity that TEL brings to this partnership,” said Randhir Thakur, managing director and CEO, Tata Electronics.

Also Read: Will Linde India really benefit from semiconductor business?

Toshiki Kawai, president ＆ CEO of Tokyo Electron, said: "This strategic collaboration spans both front-end fabrication and back-end packaging technologies, highlighting our commitment to delivering exceptional support and value to Tata Electronics. By leveraging our collective strengths, we aim to accelerate development and drive innovation across multiple technology nodes.”

Perks of collaboration

Tokyo Electron will also train Tata Electronics' workforce on its equipment, and support ongoing improvement and R&D initiatives. The collaboration will leverage the strengths of both companies to establish a robust semiconductor manufacturing ecosystem in India, the companies said in the statement.

The announcement comes at a time when more ecosystem companies are making their way to India or are expanding their presence to be part of the country's semiconductor industry.

US-based wafer fab equipment and services provider Lam Research said Monday that it broke ground for its new facility in Bengaluru, which will enable engineers here to design, test, and validate semiconductor manufacturing processes and equipment on site, significantly shortening design cycles.

Also Read: 'India should set up $10bn fund of funds to develop semiconductor design labs'

“As chipmaking becomes ever-more complex, there is growing need for greater collaboration and global engagement of expertise, intellectual property and materials,” said Sesha Varadarajan, senior vice-president at Lam’s Global Products Group. “The addition of a systems lab allows us to further capitalize on the quality of technical talent in India and build on the value we deliver at our India Center for Engineering.”

Chip assembly units

Last week, the Union government approved a ₹3,300-crore proposal from Mysuru-based Kaynes Semicon to set up a chip assembly and testing unit in Sanand, Gujarat, making it the fifth such project in the space to be approved by the government and the second in the western state. The Kaynes unit will be able to produce about 6 million chips a day which will be used in a range of industries, including automobiles, electric vehicles, consumer electronics, telecom equipment, and mobile phones.

India’s ecosystem will also need design firms in chip manufacturing many of which are start-ups, such as Chennai-based Mindgrove which said Monday that it got the government nod for design-linked incentive (DLI) scheme for developing a new Indian chip for vision processing.

Also Read: Speedy execution holds the key to the success of India’s semiconductor thrust

“Our mission has always been to design innovative solutions for the global market while building a strong, localised supply chain to support the growing needs of Indian electronic device OEMs (original equipment manufacturers) and ODMs (original design manufacturers). We are excited to receive DLI support from MeitY (ministry of electronics and information technology), which reflects the government's confidence in our shared vision as we collaborate to place India on the global semiconductor map,” said Shashwath T.R., CEO of Mindgrove Technologies.

Earlier this year, Mindgrove commercially launched India’s first indigenously-designed high-performance chip made for IoT (internet of things) devices that delivers 70% of high-end features and costs 30% less than its competitors’ products.