On November 1, Powerchip Semiconductor Manufacturing Corporation (PSMC), a leading Taiwanese foundry, announced the official commencement of its partnership with India's Tata Group to establish the country's first 12-inch wafer fabrication plant. Tata has already made the first payment for fab intellectual property (Fab IP) to PSMC, enabling progress on facility design and technical planning. The facility, located in Dholera, Gujarat, is expected to produce semiconductor chips for applications across automotive, AI, and wireless communication sectors.

This collaboration follows the definitive agreement signed on September 27 in New Delhi between PSMC and Tata Electronics, a subsidiary of Tata Group. Under the agreement, PSMC will license its mature node technology and provide workforce training, while Tata Electronics oversees the facility's construction and operation. The project, with a total investment of $11 billion funded primarily by Tata and the Indian government, aims to establish a monthly capacity of 50,000 wafers and create over 20,000 high-tech jobs in India.

The fab will leverage PSMC's mature process technology to manufacture chips such as power management integrated circuits, panel driver chips, and microcontrollers. With Tata shouldering the project's investment and PSMC providing technical expertise, the Taiwanese company plans to gradually transition to a minority stake in the fab once it achieves operational stability.

In its latest statement, PSMC confirmed that Tata Semiconductor has transferred the first installment for Fab IP as part of the contractual agreement. PSMC engineering teams have been dispatched to Dholera for on-site assessments, where they will work closely with Tata's semiconductor team to expedite the fab's design and groundwork. Tata aims to complete construction and commence production by 2026.

To accelerate the workforce training process, PSMC will host Tata employees at its Tongluo factory in Taiwan. This collaborative effort will aid in knowledge transfer and ensure a smooth operational launch.

Additionally, PSMC expects the project to bring in approximately NT$20 billion (USD ~$620 million) in revenue over its lifecycle. Separately, PSMC's high-capacity interposers, which passed customer validations, are on track for mass production by the end of this year to meet growing AI demand. The company has also begun producing four-layer DRAM wafer stacks, aligning with client strategies for Edge AI and other applications.