Tata Group Plans Rs 40,000 Crore Semiconductor Venture in Assam

  • Articles
  • Dec 15,23
Assam Chief Minister Himanta Biswa Sarma announced this development on the social media platform X (formerly Twitter).
Tata Group Plans Rs 40,000 Crore Semiconductor Venture in Assam

One year after Tata Sons Chairman Natarajan Chandrasekaran confirmed the company's entry into the semiconductor industry, Tata Group has submitted an application to establish an Outsourced Semiconductor Assembly and Test (OSAT) facility in Assam, with a proposed investment of Rs 40,000 crore. Assam Chief Minister Himanta Biswa Sarma announced this development on the social media platform X (formerly Twitter).

Tata Electronics Private Limited (TEPL), a greenfield venture under the Tata Group specializing in precision component manufacturing, will spearhead the OSAT initiative. OSAT, also known as assembly, testing, marking, and packaging (ATMP) units, play a pivotal role in semiconductor manufacturing by packaging and testing silicon chips produced at foundries before market distribution. Randhir Thakur was appointed as the Chief Executive Officer & Managing Director of Tata Electronics Pvt. Ltd (TEPL) in April to oversee these operations. An email inquiry to Tata Electronics regarding the OSAT application did not yield a response.

In a video message on X, Minister Sarma shared the positive news, stating, "Tata Electronics Limited has submitted an application to the government of India to establish an Electronic Centre at Jagiroad. With an investment of Rs 40,000 crore, the proposal includes assembly and packaging of semiconductors. Tata has assured the Assam government that, regardless of the industry's establishment, they will employ 1000 youth from Assam. They are proactively training 1000 individuals in anticipation of industry demands. The industry has significant potential and is driven by a need for skilled manpower."

This development follows the approval of the Assam Electronics (Semiconductor, etc.) Policy 2023 by the state government. Assam is in competition with Uttar Pradesh, Gujarat, and Orissa, which have also introduced semiconductor state policies.

Expressing optimism about the transformative impact of Tata's OSAT plant on entrepreneurship in the state, the Assam government is actively pursuing approval from the government of India. Minister Sarma is hopeful of receiving positive news within the next one to one and a half months.

Independent semiconductor analyst Arun Mampazhy commented on the potential implications, stating, "If Tata's Rs 40,000 crore chip packaging unit (OSAT) proposal is indeed submitted, it may pose challenges for smaller applicants in obtaining approval and securing orders. The allocation of Rs 12,000 crore to Micron and Rs 20,000 crore to Tata, coupled with Design Linked Incentives (DLI), signifies significant utilization of the Rs 76,000 crore incentive. A potential increase in allocation may be necessary if the government of India is committed to establishing silicon fabs."

The semiconductor industry is projected to achieve $1 trillion in revenue globally by 2030, and India aims to emerge as a key, trustworthy player in the semiconductor value chain over the next decade. In December 2021, the government announced a financial incentive of Rs 76,000 crores. In June of the same year, Micron's ATMP unit worth $2.7 billion in Gujarat received government approval. Other Indian conglomerates, including Vedanta and the Hiranandani Group, are also exploring opportunities in semiconductor manufacturing.

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