Tata plans to set up chip assembly unit for an investment of $300 million: Report

As part of Tata Group’s push into high-tech manufacturing, the Indian conglomerate is contemplating to invest up to $300 million to set up a semiconductor assembly and test unit. Accordingly, the company is in talks with three states for the investment, two sources familiar with the matter said.

While looking at some potential locations for the factory, Tata is scouting for land for the outsourced semiconductor assembly and test (OSAT) plant and is talking to the southern states of Tamil Nadu, Karnataka and Telangana and, the sources said. The venue is likely to be finalised by next month.

The factory is expected to start operations late next year and could employ up to 4,000 workers, the source said, while further adding that availability of skilled labour at the right cost was key to the long-term viability of the project.

"While they (Tata) are very strong on the software side of things ... hardware is something they want to add to their portfolio, which is very critical for long-term growth," the source said.

While Tata has previously announced its intention to enter the semiconductor business, this is the first time news about the group's foray into the sector has been reported. The Tata group, which controls India's top software services exporter Tata Consultancy Services and has interests in everything from autos to aviation, plans to invest in high-end electronics and digital businesses, its Chairman N. Chandrasekaran has previously said.

Tata's push will boost Indian Prime Minister Narendra Modi's 'Make in India' drive for electronics manufacturing, which has already helped turn the South Asian nation into the world's second-biggest maker of smartphones.