The Tata Group is considering an investment of $300 million to set up an outsourced semiconductor assembly and test (OSAT) plant, Reuters reported today. According to the report, the company is in talks with three states — Tamil Nadu, Karnataka and Telangana — to acquire land for the plant.
OSAT is a third-party service in the semiconductor industry. OSAT vendors provide testing and packaging services, converting silicon wafers coming out of a factory to finished chips. The OSAT space has been said to be the first step in the Indian government’s plans to attract semiconductor firms to manufacture locally in India. The Reuters report said that Tata has “looked at some potential locations” for the factory.
To be sure, the Tata Group has confirmed its interest in the semiconductor market in the past. “At the group, we have already set up a business to seize the promise of high-tech manufacturing of electronics, precision manufacturing, assembly and testing, and semiconductors in the medium term,” N. Chandrashekharan, Chairman of the Tata Group had said in August this year.
The Indian government, too, has been working on a policy to attract chip firms to India. In May, Ajay Sawhney, secretary, Ministry of Electronics and Information Technology (MeitY), had said that the policy would be ready in the next six months. Sawhney had said that the government had received multiple expressions of interests (EOIs) from global firms and was “working to formalize an incentive structure” for setting up display and semiconductor fabs in India.