Tata's Semiconductor Innovation: How India is Becoming a Global Chip Manufacturing Hub

Meta Description: Discover how Tata Group is revolutionizing semiconductor manufacturing in India with ₹91,000 crore fab projects, iPhone production, and creating thousands of skilled jobs for the nation's future.

Introduction: India's Historic Entry into Semiconductor Manufacturing

For decades, semiconductors have been dominated by countries like Taiwan, South Korea, and China. But that story is changing. Tata Electronics, in partnership with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC), is building India's first state-of-the-art semiconductor fabrication facility in Dholera, Gujarat, with a total investment of up to ₹91,000 crores (approximately US$11 billion). This isn't just a business milestone—it's a turning point for India's technological sovereignty and economic growth.

The Tata Group, India's most trusted conglomerate, is spearheading a manufacturing revolution that combines semiconductor innovation, iPhone production, and job creation. This comprehensive initiative positions India as a serious contender in the global electronics supply chain.

What is Tata Doing? The Two-Pronged Semiconductor Strategy

1. India's First Semiconductor Fabrication (Fab) Plant in Dholera, Gujarat

The Dholera fab will have manufacturing capacity of up to 50,000 wafers per month and will include next-generation factory automation capabilities deploying data analytics and machine learning to achieve industry-best factory efficiency.

The facility will manufacture chips for applications such as power management IC, display drivers, microcontrollers (MCU), and high-performance computing logic, addressing the growing demand in markets such as automotive, computing and data storage, wireless communication and artificial intelligence.

This is not just about making chips for India—it's about creating world-class technology for global markets.

2. Semiconductor Assembly and Test Facility in Assam

Parallel to the Dholera initiative, the Government of India has approved a proposal by Tata Electronics to build a state-of-the-art, greenfield semiconductor assembly and test facility in Jagiroad, Assam, with an investment outlay of ₹27,000 crore and expected to generate over 27,000 direct and indirect jobs in the region.

Tata Electronics will build this facility focusing on three key platform technologies - Wire Bond, Flip Chip, and a differentiated offering called Integrated Systems Packaging (ISP), with plans of expanding the roadmap to advanced packaging technologies in the future. The first phase of the facility becoming operational by mid-2025.

3. iPhone Manufacturing: Tata's Path to Becoming India's Foxconn

Beyond semiconductors, Tata has strategically positioned itself as a major player in Apple's iPhone manufacturing ecosystem. Apple now wants to increase India's share significantly, with the company planning to shift the production of over 60 million iPhones annually to India by the end of 2026.

Tata Electronics announced its acquisition of a controlling 60 percent stake in Pegatron Technology India Private Limited, which significantly narrows Tata Electronics' production value gap with Foxconn in assembling iPhones for Apple Inc in the country. In 2024, the company's share of total iPhone exports from India stood at 29 percent, which is now expected to increase to 48 percent with the addition of Pegatron's 19 percent share.

India assembled iPhones worth ₹1,88,144 crore (US$22 billion) in the 12 months ending March 2025, up nearly 60% year-on-year. Of this, ₹1,48,804 crore (US$17.4 billion) worth was exported.

The Benefits for India: Economic Growth and Global Relevance

1. Job Creation at Scale

The semiconductor and manufacturing initiatives will create massive employment opportunities. The Assam facility is expected to generate over 27,000 direct and indirect jobs in the region, while the Dholera fab will generate over 20,000 direct and indirect skilled jobs in the region.

With plans for additional fabs, Tata aims to create over 100,000 skilled jobs in the future—transforming India's tech workforce landscape.

2. Reducing Global Supply Chain Vulnerability

By 2030, the Global semiconductor industry is expected to grow to US$1 trillion and Indian semiconductor demand is expected to cross US$110 billion. India's entry in the semiconductor manufacturing will significantly de-risk global supply chains and will make India a very important player in the global semiconductor industry.

Countries worldwide are struggling with semiconductor shortages. By manufacturing chips locally, India becomes a resilient alternative to China and Taiwan-dependent supply chains.

3. Aligning with "Make in India, For the World"

The project is envisioned under the Government of India's Semiconductor policy being driven by the India Semiconductor Mission. This strategic alignment with government initiatives ensures sustained support and favorable policies for long-term growth.

4. Export Revenue and Foreign Exchange

Apple achieved a monthly shipment record in March 2025 when it exported $2 billion worth of iPhones from India to the United States. This demonstrates the massive revenue potential—India is directly competing with China as a manufacturing hub while earning significant foreign exchange.

5. Developing a Complete Electronics Ecosystem

Tata isn't just assembling products; it's building an entire ecosystem. Tata Electronics, having emerged as a key player in manufacturing enclosures for Apple iPhones in India, is currently focused on internally designing and developing "very sophisticated" and complex high-precision machines producing the iPhone casings, previously sourced from China.

This import substitution creates a multiplier effect—supporting local component manufacturers, machine makers, and reducing India's import dependency.

6. Attracting Global Investment

Success in semiconductor manufacturing attracts more multinational corporations. Foxconn has also started producing Apple AirPods at a plant in Hyderabad, Telangana, showing that India's infrastructure now appeals to global manufacturers beyond just chip production.

7. Building Technological Capabilities

As per the agreement with PSMC, the company will provide design and construction support to build India's first AI-enabled state-of-the-art greenfield Fab in Gujarat, license a broad portfolio of technologies and provide engineering support to successfully transfer licensed technology.

Through technology transfer from world-class partners, India builds indigenous capabilities—crucial for long-term competitiveness.

Additional Benefits Beyond Economics

Youth Skilling and Education

These facilities require highly skilled engineers, technicians, and supervisors. The semiconductor industry will drive India's STEM education agenda, creating demand for quality engineering programs and technical certifications.

Regional Development

This will greatly boost industrialization in North-East India, particularly Assam. Development is concentrated in metro cities, but this project brings cutting-edge manufacturing to peripheral regions.

Meeting Global Demand

The new semiconductor Fab will manufacture chips for applications such as power management IC, display drivers, microcontrollers (MCU) and high-performance computing logic, addressing the growing demand in markets such as automotive, computing and data storage, wireless communication and artificial intelligence.

India is positioned to serve the booming EV, AI, and 5G markets globally.

Why This Matters Now: The Geopolitical Context

The world is re-evaluating its reliance on China for semiconductors. The changing U.S.-China trade relations create a primary motivation for Apple to move its strategic direction, with President Trump enforcing maximum tariff rates of 145% on various products exported from China.

India emerges as a stable, democratic, cost-effective alternative. Manufacturing in India costs around ₹2,567.12 (US$30) per unit, compared to nearly ₹33,372.57 (US$390) in the US, preserving India's competitiveness.

The Road Ahead: Challenges and Opportunities

While Tata's initiatives are groundbreaking, challenges remain. Building a semiconductor ecosystem requires sustained investment, skilled talent retention, and consistent government support. However, with proven government backing through the Production-Linked Incentive (PLI) scheme and strategic partnerships with global leaders like PSMC, India is well-positioned to overcome these hurdles.

Tata Group's substantial investments and strategic partnerships are driving India's emergence as a key player in the global semiconductor landscape.

Conclusion: India's Semiconductor Dawn

Tata Group's semiconductor innovation represents more than just business expansion—it's India's declaration of technological independence. Through massive investments in Dholera and Assam, combined with strategic dominance in iPhone manufacturing, India is rewriting the global electronics manufacturing narrative.

The benefits are multifaceted: job creation, export revenue, technological capability-building, and positioning India as a trustworthy alternative in the global supply chain. As the world seeks diversification away from China, India's semiconductor revolution, led by Tata, is the answer the world has been waiting for.

The future is being manufactured in India—one chip at a time.