Tata Electronics in Talks with NXP for Foundry and OSAT Services Amid India's Semiconductor Expansion

India’s Tata Electronics is reportedly in advanced discussions with Dutch semiconductor giant NXP Semiconductors to collaborate on wafer fabrication and outsourced semiconductor assembly and testing (OSAT) services, according to a report by The Economic Times.

This strategic partnership aligns with Tata Electronics’ broader push into the semiconductor industry. The company is currently constructing India’s first commercial 28nm wafer fabrication facility, which is expected to begin operations by the end of 2025. The plant will have a monthly production capacity of 50,000 wafers. In addition to wafer fabrication, Tata also owns backend OSAT infrastructure, enabling it to offer integrated device manufacturing (IDM)-like services.

The potential collaboration would allow NXP to complement its IDM model with selective foundry outsourcing, which could increase flexibility and supply chain resilience. Sources close to the matter suggest that NXP is currently evaluating which product lines can be produced at Tata’s upcoming foundry. Once operational, prototype chip production is expected to follow.

This development comes after the Indian government approved the construction of three semiconductor fabs in February 2024, representing a combined investment of ₹1.256 trillion INR (~US$15 billion), further advancing India’s ambition to become a global electronics manufacturing hub.

Among these projects is the ₹910 billion INR fab being built by Tata Group in Dholera, Gujarat, in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corp. (PSMC). Additionally, CG Power has partnered with Japan’s Renesas Electronics and Thailand’s Stars Microelectronics to invest ₹76 billion INR in another fab in Gujarat. A third facility, with an investment of ₹270 billion INR, is under development in Assam, led by Tata Semiconductor Assembly and Test Pvt Ltd.

India’s aggressive semiconductor strategy underscores its commitment to reducing dependency on global supply chains and establishing itself as a major player in the advanced electronics sector.