NEW DELHI: India's Tata group is in talks with three states to set up a semiconductor assembly and test unit, according to two sources familiar with the matter, as part of the conglomerate's push into high-tech manufacturing.
Tata is talking to the southern states of Tamil Nadu, Karnataka and Telangana and is looking for land for the outsourced semiconductor assembly and test OSAT plant, the sources said, but they won't be identified as the matter is not public.
An OSAT plant packages, assembles and tests foundry-made silicon wafers, turning them into finished semiconductor chips.
One source said that Tata looked at some potential locations for the factory, and said a venue was likely to be finalised by next month.
The source said that they Tata are very strong on the software side of things and they want to add to their portfolio, which is critical for long-term growth.
The three states and the Tata group did not respond to requests for comment.
Tata's push will bolster Indian Prime Minister Narendra Modi's drive for electronics manufacturing, which has already helped turn the South Asian nation into the world's second-biggest maker of smartphones.
The Tata group, which controls India's top software services exporter Tata Consultancy Services and plans to invest in high-end electronics and digital businesses, plans to invest in high-end electronics and digital businesses, chairman N Chandrasekaran previously said.
Potential clients of Tata's OSAT business include Intel, Advanced Micro Devices AMD and STMicroelectronics.
The factory is expected to start operations later next year and could employ up to 4,000 workers, according to the source, availability of skilled labour at the right cost was key to the long-term viability of the project.
When Tata starts, the ecosystem will come around. It's very important to find the right place from a labour standpoint, the source said.
Tata is already building a high-tech electronics manufacturing facility in southern Tamil Nadu state.