A year after Tata Sons Chairman Natarajan Chandrasekaran announced the company’s ambitious plans to enter the semiconductor business, the conglomerate has taken a significant step by submitting an application to establish an Outsourced Semiconductor Assembly and Test (OSAT) facility in Assam. This significant development, valued at Rs 40,000 crore, shows Tata Group’s commitment to reshape India’s semiconductor industry. Himanta Biswa Sarma, the Chief Minister of Assam, confirmed this groundbreaking move through a post on the social media platform X (formerly Twitter).
According to Business Today, the venture will be executed under Tata Electronics Private Limited (TEPL), a greenfield initiative renowned for manufacturing precision components.
OSAT, commonly known as assembly, testing, marking, and packaging (ATMP) units, play a pivotal role in semiconductor manufacturing by packaging and testing silicon chips before they reach the market. Randhir Thakur, appointed as the Chief Executive Officer & Managing Director of Tata Electronics Pvt. Ltd (TEPL) in April this year, is expected to spearhead this ambitious venture as per the report.
The proposed electronic center is slated to find its home in Jagiroad, strategically positioned just 55 kilometers from Guwahati, Assam’s largest city, according to organizer.org. The chosen site was once home to the Nagaon paper mill under Hindustan Paper Corporation. After the paper mill’s closure in 2021, the Assam government’s Industrial Corporation Limited took ownership, paving the way for renewed industrial development.
Chief Minister Sarma revealed that Tata Electronics Ltd initiated preliminary discussions with the state government about the semiconductor assembly and packaging plant. Satisfied with the collaborative atmosphere and the state’s commitment to fostering industrial growth, Tata Group is seeking final approval from the Centre.
“We are in touch with the Centre, and we hope that the final approval will be given in a month or two,” stated the Chief Minister, underscoring the potential for a substantial infusion of capital into the state, setting the stage for accelerated industrialization.
Tata’s commitment goes beyond financial investment. The company has communicated to the Assam government its intention to train 1000 youth from Assam, irrespective of the industry’s establishment. This proactive approach ensures a skilled workforce is ready, aligning with the manpower-driven nature of the semiconductor industry.
This development aligns with the approval of Assam Electronics (Semiconductor, etc.) Policy 2023, placing Assam in competition with states like Uttar Pradesh, Gujarat, and Orissa, all vying for semiconductor manufacturing prominence.
In the words of Chief Minister Sarma, Tata’s OSAT plant holds the potential to transform the entrepreneurship sector in the state. The Assam government is working in tandem with the government of India to expedite the proposal’s approval, with hopes of positive news within the next one to one-and-a-half months.
Commenting on this development, independent semiconductor analyst Arun Mampazhy told Business Today, “If Tata has indeed submitted Rs 40,000 crore chip packaging unit (OSAT) proposal, it will have a collateral impact. It may get tougher for smaller applicants to get approval and even if approved, to get orders. Also, Rs 12,000 crore for Micron and Rs 20,000 crore to Tata along with Design Linked Incentives (DLI), half of the Rs 76,000 crore incentive will be over. Overlay will need to be increased if the government of India is serious about having silicon fabs.”
The semiconductor industry, projected to reach $1 trillion in revenue globally by 2030, signifies a pivotal juncture for India’s technological prowess. The government’s incentives and the entry of major conglomerates like Tata signal a transformative era in India’s semiconductor journey, propelling the nation toward becoming a trusted and reliable player in the semiconductor value chain.