Not cutting-edge, but can Tata's chip fab reduce India's import bill?

India's first semiconductor fabrication plant is making headlines for what it may not produce. Here's why

Tata Electronics is likely to begin manufacturing chips at its upcoming Dholera facility using mature process technologies, with commercial production expected to start largely on the 90-nanometre (nm) node rather than the more advanced 28nm technology, Bloomberg reported last week.

 

While the report may imply that India's biggest semiconductor project is falling behind global technology, Tata Electronics' manufacturing plan presents a broader picture.

 

The company said the fab will produce chips across technology nodes ranging from 28nm to 110nm, with manufacturing expected to begin gradually from mature nodes before expanding to 28nm. It said that approach was part of the original roadmap and not a change in strategy.

   

This distinction matters because semiconductor manufacturing is not driven solely by the race towards the smallest node sizes. While advanced processors used in artificial intelligence, premium smartphones and high-performance computing rely on leading-edge manufacturing, a large share of chips used in automobiles, consumer electronics, industrial equipment and power systems continue to be produced using mature technologies.

 

The question, therefore, is not whether Tata's fab will compete with Taiwan Semiconductor Manufacturing Co. (TSMC) or Samsung in making the world's most advanced chips. It is whether the products planned at Dholera can begin replacing some of the semiconductors that India imports in large quantities for its electronics and manufacturing industries. 

What Tata's Dholera fab will manufacture

The Dholera semiconductor fabrication facility, approved under the India Semiconductor Mission (ISM), is one of the country's biggest industrial projects in electronics manufacturing.

 

The project has an investment of about ₹91,000 crore and is being developed in partnership with Taiwan-based Powerchip Semiconductor Manufacturing Corporation (PSMC). The fab has a planned production capacity of up to 50,000 wafer starts per month.

 

According to Tata Electronics, the facility is designed to manufacture chips across multiple technology nodes: 28nm, 40nm, 55nm, 90nm and 110nm.

 

The company said production was "always" intended to begin with 55nm and 90nm before adding 28nm, which it described as "a key part of our offering".

 

PSMC also said it is common for semiconductor manufacturers to introduce technology platforms gradually, beginning with mature nodes before expanding to more advanced processes.

 

The Bloomberg report said earlier public statements by Tata Group chairman N Chandrasekaran had emphasised the 28nm node as the starting point of the group's semiconductor journey. It also reported that commercial production at the Dholera facility is now expected to begin in mid-2028, according to Electronics and Information Technology Minister Ashwini Vaishnaw.

 

While process nodes are often used as shorthand for the sophistication of semiconductor manufacturing, they do not determine whether a chip is commercially relevant. Different applications require different manufacturing technologies depending on factors such as cost, reliability, power efficiency and operating life.

Why mature nodes still matter

Industry discussions often focus on chips built using the latest manufacturing processes because they power flagship smartphones, AI accelerators and advanced computing systems. However, these products account for only one segment of the semiconductor market.

 

The NITI Aayog's Future of India's Semiconductor Industry roadmap, published in May this year, argued that reducing semiconductor import dependence and building domestic manufacturing capability is becoming important not only for industrial growth but also for technological resilience.

 

The report also said India cannot develop every segment of the semiconductor value chain simultaneously and should focus on areas where it can build competitive strengths over time.

 

It identified manufacturing, advanced packaging, design capabilities and partnerships as part of that long-term strategy.

 

Similarly, a paper published by the Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA) argued that semiconductors now support a much wider range of technologies than computers and smartphones. It said they underpin digital infrastructure, energy systems, communications, electric vehicles, defence equipment and industrial automation, making domestic capability increasingly relevant from both economic and national security perspectives.

Where are mature-node chips used?

The products Tata Electronics plans to manufacture are less visible than application processors used in premium smartphones or graphics chips designed for artificial intelligence. But they form the backbone of a much wider range of electronic systems.

 

According to Tata Electronics, the Dholera fab will manufacture products including power-management integrated circuits (PMICs), microcontrollers, display driver integrated circuits and computing logic chips. These components are used across sectors such as automobiles, consumer electronics, telecommunications, industrial equipment and power infrastructure.

 

Microcontrollers are designed to execute dedicated functions within electronic systems. They control operations ranging from engine management, braking and lighting in vehicles to industrial automation, smart appliances and embedded electronic systems.

 

Power-management chips regulate and distribute electrical power inside electronic devices. They are widely used in smartphones, laptops, electric vehicles, charging systems, telecom equipment and household appliances to improve power efficiency and battery performance.

 

Display driver ICs act as the interface between processors and screens, controlling how images are displayed on televisions, smartphones, monitors, vehicle dashboards and other electronic displays.

Can these chips reduce India's import dependence?

India's semiconductor ambitions are closely linked to its broader electronics manufacturing goals.

 

Despite having one of the world's largest semiconductor design workforces and a rapidly growing electronics market, India has historically depended on imported chips because it lacked commercial semiconductor fabrication facilities.

 

A research paper published in February titled 'India's Semiconductors and Strategic Dependence: India's Transition from Imports to Indigenous Manufacturing' argued that India's dependence extends beyond trade and has become a strategic issue affecting electronics manufacturing, automotive production, digital infrastructure and supply-chain resilience.

 

The paper said India's domestic capabilities have largely remained concentrated in chip design, assembly, testing and packaging, while commercial wafer fabrication has been absent. Which is why manufacturers have relied heavily on overseas suppliers to meet demand across industries.

 

The NITI Aayog also said semiconductor import dependence has emerged as a strategic challenge as chips increasingly support sectors such as defence, mobility, AI, telecommunications and digital infrastructure. It argued that strengthening domestic manufacturing capability has become important for building resilient supply chains.

 

The categories of chips planned at Tata's Dholera facility align with several products that are widely used in India's electronics manufacturing ecosystem.

 

If manufactured at commercial scale, these products could allow a part of this demand to be met domestically instead of entirely through imports.

 

At the same time, semiconductor trade data generally classify imports by product category rather than by manufacturing process. That makes it difficult to estimate what proportion of India's semiconductor imports could eventually be substituted by chips produced on 28nm to 110nm technology nodes.

What India's first fab is unlikely to produce

While Tata's fab could supply several categories of mature-node chips, it is not expected to eliminate India's dependence on imported semiconductors.

 

The Dholera facility is not being designed to manufacture the most advanced processors used in flagship smartphones, artificial intelligence systems or high-performance computing.

 

Those products are typically built using manufacturing technologies well below 28nm, with global leaders such as Taiwan Semiconductor Manufacturing Co. (TSMC) already producing chips at 2nm and deriving much of their revenue from nodes of 5nm and below.

 

Bloomberg reported that while 28nm remains one of the industry's most commercially important mature nodes, beginning commercial production with 90nm indicates Tata is initially targeting applications such as industrial equipment and automobiles rather than the most advanced computing markets.

 

The Dholera fab may not place India at the cutting edge of global chip manufacturing, but it could become the country's first step towards producing a wider range of semiconductors at home.