Tata Electronics to export semiconductor samples to Japan, US, Europe

Tata Electronics Ltd has initiated the export of a limited number of semiconductor chips packaged at its pilot line located in Bengaluru, according to sources familiar with the matter. These packaged chips are being sent to several of Tata Electronics' partners situated in Japan, the US, and Europe. This development coincides with the company's preparations for the establishment of a new chip packaging unit in Assam and the construction of a $10 billion chip foundry in Gujarat.

As per reports from ET, a source stated, "Tata Electronics has packaged chips there which they are sending to customers right now outside the country. They have multiple partners and are expanding their customer base. Some of these (products) are still in the pilot stage."

Furthermore, it was disclosed by another source that the company is on the brink of completing a tape-out of semiconductor chips across various nodes, including 28, 40, 55, and 65 nm, along with some higher nodes. The tape-out marks the culmination of the designing process for integrated circuits or printed circuit boards before they proceed to manufacturing.

The source added, "There are multiple rounds before a successful tape-out. So, some of these products will be in advanced stages of R&D and they will be sent to select customers to obtain feedback for testing and improvement. Commercial production is slated for 2027."

The chips currently being packaged and exported by Tata Electronics could be utilized in diverse products, as they have not been designed for a specific purpose. The source clarified, "When you package the chips, it really does not matter what the chips are used for. It is just a matter of when you package them and prepare them to be used. Tata Electronics has products in multiple areas."

In April, reports surfaced that Tata Electronics had struck a strategic agreement with Tesla to supply semiconductor chips for the latter's global operations. However, Tata Electronics refrained from responding to ET's queries regarding this development.

According to Neil Shah, Vice President at market research firm Counterpoint Research, it is imperative for Tata Group to demonstrate its chip designing and manufacturing capabilities to potential clients and partners before the fabs become operational in the next 30-36 months. Shah suggested that Tata could leverage its extensive expertise and vision from the early semiconductor design development work undertaken by companies like Tata Elxsi and Sankhya Labs.

"Tata Electronics should establish robust front-end processes for co-design, testing, and quality assurance processes for final production chip tape-outs when the fab is up," he emphasized. "They must also formulate diligent back-end ATMP processes, services, and pilots to achieve global manufacturing standards, lucrative yield rates, and become a one-stop shop for both semiconductor design and manufacturing in India."

The chip foundry established by the Tata group in Dholera, in partnership with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC), is projected to have a planned capacity of up to 50,000 wafer starts per month. The facility aims to manufacture chips in advanced nodes such as 28 nm and 40 nm, in addition to some legacy or mature nodes like 55 nm, 90 nm, and 110 nm.

The Tata-PSMC joint venture intends to concentrate on manufacturing chips in specific nodes before transitioning to the 22 nm segment. Presently, several small and medium-scale packaging companies in India, including Tessolve Semiconductor, CDIL, and SCL, are engaged in similar activities. However, experts suggest that their scale of operations will not match that of larger players like Micron or Tata Group.

In addition to the foundry, Tata Group is also developing an outsourced assembly and testing (OSAT) unit in Assam. This pivotal step in the semiconductor value chain involves assembling or packaging wafers produced by semiconductor fabs and testing them before they are utilized in the final product.

CG Power is also advancing with a chip assembly and testing unit in Sanand, Gujarat. Other OSAT plants, such as the one announced by the HCL Group-Foxconn group joint venture and another by Hiranandani Group's Tarq Semiconductors in partnership with Kaynes Technology, are currently awaiting government approval.