Construction Industry News
India's Tata group is in talks with three states to invest up to $300 million in setting up a semiconductor assembly and testing unit, two sources familiar with the matter said, as part of the conglomerate's push on high-tech manufacturing.
Tata is in talks with the southern states of Tamil Nadu, Karnataka and Telangana and is seeking land for the outsourced semiconductor assembly and testing plant (OSAT), the sources said, but will not be identified as the matter is not public.
While Tata has previously said it would likely enter the semiconductor industry, this is the first time news of the group's foray into the industry and its magnitude has been reported.
An OSAT plant packages, assembles and tests foundry-made silicon wafers and turns them into finished semiconductor chips.
Tata has looked at a number of potential sites for the factory, one of the sources said, and the addition of a site is likely to be completed next month.
“While they (Tata) are very strong in software, hardware is something they want to add to their portfolio, which is critical for long-term growth,” the source said.
The Tata group and the three states did not respond to requests for comment.
Tata's push will amplify Indian Prime Minister Narendra Modi's 'Make in India' drive for electronics manufacturing, which has already helped the South Asian nation become the second largest smartphone manufacturer in the world.
The Tata group, which controls India's largest software services exporter Tata Consultancy Services and has interests in everything from automobiles to aerospace, plans to invest in high-end electronics and digital companies, chairman N. Chandrasekaran has previously said.
Potential customers of Tata's OSAT business include Intel, Advanced Micro Devices (AMD) and STMicroelectronics.
The factory is expected to start operating at the end of next year and can employ up to 4,000 workers, the source said. Adding a skilled workforce at the right cost was key to the long-term viability of the project.
"Once Tata kicks in, the ecosystem will come around... So it's very important to find the right place from a labor standpoint," the source said.
Separately, Tata is already building a high-tech electronics factory in the southern state of Tamil Nadu.
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