Tata Electronics resorts to older tech to launch its chip foray

Tata Electronics Pvt. Ltd. is preparing to make India’s first semiconductor wafers on far older technology than it originally expected, underscoring the challenges the country faces in trying to build a domestic chip industry from scratch.

The tech arm of the sprawling Tata Group is preparing to build the country’s first large-scale chip fab or production plant mostly based on 90-nanometer process technology at its facility at Dholera, Gujarat, said people familiar with the matter, who asked not to be identified discussing private deliberations.

That’s a very mature technology used in lower-end industrial applications and cars—one which risks becoming obsolete in coming years. It’s also a far humbler start than the 28 nm node that Tata Sons Pvt. Ltd., the group’s holding company, had touted as the starting point of its chipmaking journey in its annual report for the year ended March 2025.

Tata’s public ambitions might have overstated the reality of what can be achieved in the near term, the people said. The company has partnered with Taiwan-based Powerchip Semiconductor Manufacturing Corp. for its chipmaking debut.

A spokesperson for Tata Electronics said the Dholera fab will manufacture chips spanning 28 nm to 110 nm. The plan “was always to start with 55 nm and 90 nm, followed by 28 nm”, the spokesperson said, adding that 28nm “will be a key part of our offering”.

The partnership with Tata covers several technology nodes with the most advanced process being 28 nm, PSMC Spokesperson Eric Tang said in an emailed response. “It is common that the introduction of the technology platform will be gradual, starting with more mature nodes,” Tang said.

Learning Curve

The initial choice of offerings shows that Tata Group, despite its manufacturing prowess in making products ranging from luxury sedans to industrial chemicals, is still early in the learning curve of the intricate world of chipmaking. Yet Prime Minister Narendra Modi’s government is leaning on the conglomerate to help reduce India’s import dependence and secure a seat at the global chip table.

The group is spending tens of billions of dollars to build chip fabrication and chip-assembly plants even as it navigates early hurdles across infrastructure, technology and skilled talent.

New Delhi on Wednesday approved ₹1.28 trillion in new state aid for chip design, manufacturing equipment and supply-chain development. The fund, however, will apply only to future, incremental investments and will not retroactively offset spending already committed.

The new incentives will complement India’s earlier $10 billion aid package announced in 2021, which offered to bear half cost of setting up semiconductor projects including Tata’s Dholera fab—which is being built with a planned capital expenditure of $10.7 billion and one that was initially expected to start with the 28 nm chips.

“We have chosen to start our chip journey at the 28nm node—it is a stable node,” Tata Group Chairman Natarajan Chandrasekaran said in Tata Sons’ annual report. The group would then advance toward more sophisticated technologies, he said.

India vs Taiwan vs Korea

Chip-manufacturing leaders such as Taiwan and South Korea have a head start of several decades over India. Taiwan Semiconductor Manufacturing Co., the go-to chipmaker for Nvidia Corp. and Apple Inc., began 2 nm volume production last year and makes most of its revenue from nodes 5 nm and smaller.

Still, 28 nm is among the semiconductor industry’s most commercially important mature nodes, producing chips used across smartphones, communications equipment, consumer electronics and, increasingly, vehicles. Beginning instead with 90 nm production suggests Tata is initially targeting a less lucrative part of the market.

While Tata had previously aimed to begin commercial production by the end of 2026, India’s technology minister Ashwini Vaishnaw told reporters Wednesday that the Dholera plant is expected to start commercial operations in mid-2028.