India's First Commercial Fab: Dholera

What the Tata Electronics and PSMC fab in Gujarat will make, why it focuses on mature chips, and the challenges of building a fab from scratch.

In February 2024, the government approved India’s first commercial semiconductor fab: a joint project by Tata Electronics and Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC) in Dholera, Gujarat.

The project

Investment of around 91,000 crore rupees.
Planned capacity of up to 50,000 wafers per month.
Focus on mature process nodes, such as 28 nanometres and above.

Why mature nodes?

The most advanced chips, at 3 or 5 nanometres, are made by very few companies and require enormous investment and expertise. Mature-node chips are used widely in:

Cars and EVs.
Power management.
Appliances and consumer electronics.
Industrial equipment.
Telecom.

Demand for these chips is large and stable, and the 2021 shortage mainly involved such chips.

Why a Taiwanese partner?

PSMC brings technology and experience. Building a fab from scratch without an experienced partner is extremely difficult.

Challenges

Ultra-pure water and reliable electricity supply in large volumes.
Skilled workforce: fab engineers and technicians.
Suppliers of chemicals, gases and equipment services.
Competition from established fabs in China, Taiwan and elsewhere.
Timelines: fabs take years to build and ramp up.

Dholera

Dholera is being developed as a special investment region with planned infrastructure.

The car chip

An Indian carmaker uses mature-node chips for engine controls and dashboards. When the Dholera fab begins production, it could source some chips domestically, reducing the risk of another shortage.

Thinking only cutting-edge chips matter

Mature-node chips are used in cars, appliances and industry, and caused much of the 2021 shortage.

Key takeaways

India's first commercial fab, by Tata and PSMC in Dholera, was approved in February 2024.
It involves around 91,000 crore rupees and up to 50,000 wafers a month.
It focuses on mature nodes of 28 nanometres and above.
Water, power, skills and suppliers are key challenges.