Tata Electronics taps chip giant NXP to bag orders for fab, OSAT
Tata Electronics
is in discussions to onboard Dutch semiconductor major
NXP Semiconductors
as a customer for its upcoming
fabrication plant
in Gujarat and outsourced semiconductor assembly and test (OSAT) facility in Assam, multiple people aware of the development told ET.
The proposed deal is expected to mirror Tata Electronics' collaboration with US-based Analog Devices Inc (ADI), under which the companies are exploring opportunities to manufacture ADI chips in India, one of the sources said.
Tesla is also a likely customer for Tatas' semiconductor business, the people said.
While companies like NXP have their own fabs, they tend to outsource some of their production, and that is where the Tata fab and OSAT could fit in, an industry insider told ET.
'They are evaluating which products can be mapped and produced out of the fab in India… Once the fab is up and running, then they will begin with a prototype,' this person said. 'They do a lot of analog chips and many of the industrial and security chips do not need the latest technology. There is also a case being made for supply chain resilience, which are all some of the reasons driving the dialogue with Tata Electronics.'
This person noted that companies want to have an option not to be reliant solely on the likes of
TSMC
, a leading Taiwanese semiconductor contract manufacturing and design company.
'In the advanced node, there isn't much of an option, but in the mature nodes, companies like NXP would see a benefit in bringing in players like Tata Electronics,' he said.
Queries sent to Tata Electronics and NXP Semiconductors remained unanswered as of press time Sunday.
'Tata Group has been working with NXP for years,' said Neil Shah, vice president-research at Counterpoint Research. 'It only makes sense for Tata Electronics to speak to multiple potential customers and build an India rolodex for their upcoming fab, and NXP is a good fit owing to their established play especially in
automotive chips
.'
Tatas' fab in Dholera, with a 50,000 wafer starts per month capacity, is expected to be operational later this year.
The facility will produce high-performance compute chips with 28 nm technology, besides power management chips for electric vehicles, telecom, defence, automotive, consumer electronics, display, and power electronics.
Power management chips are high voltage, high current applications.
Tata Semiconductor Assembly and Test (TSAT) in Morigaon, Assam, is developing indigenous advanced semiconductor packaging technologies including flip chip and integrated system in package technologies with a capacity of 48 million per day. The segments it will cater to include automotive, electric vehicles, consumer electronics, telecom, and mobile phones.
Tata Electronics had signed a memorandum of understanding (MoU) with ADI in September last year to explore contract manufacturing of the latter's products in India.
NXP owns fabs in multiple locations. Its Nijmegen, Netherlands facility includes manufacturing, R&D, testing, technology enablement and support functions. As per its website, this is one of the largest chip manufacturing plants in Europe with over 565k wafers produced to date.
NXP also owns and operates four wafer fabrication facilities in the US. The representative products of these fabs include microcontrollers (MCUs) and microprocessors (MPUs), power management devices, RF transceivers, amplifiers and sensors.
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