Tata Electronics to invest $300 mn. for semiconductor industry
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New Delhi, Aug 6: Tata Electronics is in talks with large global semiconductor companies and Outsourced Semiconductor Assembly and Test (OSAT) vendors to foray into advanced packaging of semiconductor components, said Raja Manickam, the chief executive of its OSAT arm.
OSAT vendors provide third-party Integrated Circuit-packaging and test services.
Tata Electronics has surveyed four states - Tamil Nadu, Karnataka, Telangana, and Odisha - as prospective locations to house its facility, Manickam told media. Tata Electronics already has an operational facility in Hosur, Tamil Nadu. “We've written up a report on pros and cons in all the four states. Hopefully, by mid-May, we'll make an announcement on location,” Manickam said. “We have not finalized or signed up with any of them yet but we will get into advanced packaging for sure," Manickam, previously the founder of Tessolve Semiconductors, said. The company was, however, only scouting the market for a technology partner for advanced packaging and not traditional packaging, which, Manickam said, was the other segment of the packaging business. “Traditional packaging is a high-volume business. We don't need a partner for that. We can build it ourselves,” he said. Advanced packaging allows semiconductor companies to combine mature and leading-edge chips in an integrated system for applications that need both types, which lowers costs. This trend, called heterogeneous integration, enables companies to combine multiple smaller chips instead of making one large chip. Larger chips often have lower yields, with the drop typically scaling with chip size, so heterogeneous integration may deliver profound cost benefits. Last year, Tata Sons chairman N Chandrasekharan said the salt-to-software conglomerate intends to foray into semiconductor manufacturing. “At the Tata group, we have already pivoted into a number of new businesses like electronics manufacturing, 5G network equipment as well as semiconductors,” he had said at the annual general meeting of the IMC Chamber of Commerce and Industry.
Last year, Tata Sons bought a 43.35% stake in telecom gear maker Tejas Networks Ltd for ₹1,884 crores. Earlier this year, Tejas Networks announced plans to acquire Saankhya Labs in a two-phase process. Founded in 2007, Saankhya Labs has developed a wide range of system and semiconductor products for cellular wireless, broadcast radios, and satellite communication ground terminals. The purchase of Saankhya is in line with Tata's ambitions in the semiconductor business. The government has unveiled a $10 billion (about Rs 76,000 crore) plan to attract chipmakers from around the world to set up shop in India. Three consortiums -- Vedanta-Foxconn, ISMC, and IGSS Venture -- have applied for incentives to manufacture chips and set up a fab.