India’s first AI-powered semiconductor fab sees a green light as Tata Electronics finalises the definitive agreement with PSMC. Launching in Gujarat by 2026, it is set to transform India’s tech landscape.
On Thursday, Tata Electronics announced that it has finalised a conclusive agreement with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) to support the construction of an AI-enabled greenfield semiconductor fabrication facility. The company claims this will be the country’s first of its kind.
The plant, located in Dholera, Gujarat, is set to launch in 2026 and is currently under construction. It is part of a ₹910 billion project in collaboration with PSMC, addressing domestic and international demand.
Under this agreement, PSMC will provide design and construction assistance and license a comprehensive range of technologies. They will also offer engineering support to facilitate the transfer of these technologies to the facility, which is expected to have a manufacturing capacity of up to 50,000 wafers per month.
The company stated that the fab will incorporate highly advanced factory automation features, utilising data analytics and machine learning for enhanced efficiency. It will produce chips for various applications, including power management integrated circuits (ICs), display drivers, microcontrollers (MCUs), and high-performance computing logic, addressing the rising demand in sectors such as AI, automotive, computing, data storage, and wireless communication.
Tata Electronics described the agreement with PSMC as a ‘pivotal’ step, which aims to build advanced skills and develop a network of semiconductor manufacturing suppliers and ecosystem partners, laying the groundwork for a domestic semiconductor ecosystem.
Last week, the Mint reported that Tata Electronics plans to build two additional fabs in the next five to seven years, likely matching the scale of the first facility in Dholera. Details on partnerships are still pending. The company is also strengthening the local supply chain and developing a residential facility for 4,000-5,000 workers at the site.
