According to reports, Tata Electronics is in discussions to onboard Dutch semiconductor major NXP Semiconductors as a customer for its upcoming fabrication plant in Gujarat and outsourced semiconductor assembly and test (OSAT) facility in Assam.

The suggested agreement is anticipated to resemble Tata Electronics' partnership with US-based Analog Devices Inc (ADI), in which both firms are considering chances to produce ADI chips in India.

Tesla is probably a potential client for Tatas' semiconductor venture.

Although firms like NXP possess their fabrication facilities, they often subcontract portions of their manufacturing, which is where the Tata fab and OSAT may be suitable.

They are assessing which products can be designed and manufactured from the factory in India. Once the fab is operational, they will start with a prototype.

They produce numerous analog chips, and many industrial and security chips do not require the most advanced technology. Additionally, there is an argument for supply chain resilience, which represents some of the factors influencing the conversation with Tata Electronics.

Businesses seek an alternative to avoid dependence on TSMC, a prominent Taiwanese semiconductor manufacturing and design firm.

In the advanced node, options are limited, but in the mature nodes, firms such as NXP would gain from involving companies like Tata Electronics.

Also Read: The Quantum Computing Age is Upon US Sooner than Expected

Neil Shah, vice president-research at Counterpoint Research says, “Tata Group has been working with NXP for years. It only makes sense for Tata Electronics to speak to multiple potential customers and build an India rolodex for their upcoming fab, and NXP is a good fit owing to their established play especially in automotive chips.”