Tokyo Electron Ltd to supply equipment to Tata Electronics and train workforce at first factory in India

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

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

In a statement announcing the partnership, Tata Electronics said the alliance with TEL will be a key pillar in achieving its execution goals. The company aims to start producing chips from 2026.

“We have a bold vision to become a leader in electronics manufacturing by offering integrated solutions across the entire value chain to our global customers. TEL has a long history of working closely with its customers, and its expertise in the semiconductor equipment space will help build a vibrant ecosystem to support the timely execution of commissioning of our advanced manufacturing and packaging factories. We are excited about the customer-centricity that TEL brings to this partnership,” said Randhir Thakur, Managing Director and CEO, Tata Electronics.

Toshiki Kawai, President and CEO of Tokyo Electron, said: “This strategic collaboration spans both upstream manufacturing and final packaging technologies, underscoring 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.”

Benefits of collaboration

Tokyo Electron will also train Tata Electronics’ workforce in the use of its equipment and support continuous improvement and research and development 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 companies in the ecosystem are coming to India or expanding their presence to be a part of the country’s semiconductor industry.

Lam Research, a US-based wafer manufacturing equipment and services provider, said on Monday it has started construction of 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.

“As chip manufacturing becomes increasingly complex, there is a growing need for greater global collaboration and participation of experts, intellectual property and materials,” said Sesha Varadarajan, senior vice president of 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 leverage the value we offer at our India Engineering Center.”

Chip assembly units

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

India’s ecosystem will also need design-led companies for chip manufacturing, many of which are startups, such as Chennai-based Mindgrove, which said on Monday it has received government approval for the design-linked incentive (DLI) scheme to develop a new Indian chip for vision processing.

“Our mission has always been to design innovative solutions for the global market while building a robust, localized supply chain to meet the growing needs of Indian electronics OEMs and ODMs. We are excited to receive the support of DLI from MeitY (Ministry of Electronics and Information Technology), reflecting the government’s confidence in our shared vision as we collaborate to put India on the global semiconductor map,” said Shashwath TR, CEO, Mindgrove Technologies.

Earlier this year, Mindgrove commercially launched India’s first locally designed high-performance chip for IoT (Internet of Things) devices that offers 70% of high-end features and costs 30% less than competitors’ products.