In recent years, India has developed rapidly in the field of electronics manufacturing, and its semiconductor industry has shown vigorous vitality. On March 5, 2025, India's Tata Electronics signed a memorandum of understanding (MoU) with Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC) and Himax Technologies to revolutionize India's display and ultra-low-power AI sensor product and technology ecosystem. This partnership not only marks another important step forward in India's semiconductor industry, but also heralds further diversification of the global semiconductor supply chain. China Exportsemi will interpret the situation behind it for you from multiple angles.
1. The background of the rise of India's semiconductor industry
The Indian government has vigorously promoted the "Make in India" initiative and has attached great importance to the development of the field of electronics manufacturing. According to IESA, the addressable market size of electronics in India was as high as $260 billion in 2021 and is expected to grow at a CAGR of 16.6% from 2020 to 2025 to exceed $480 billion by 2025. Driven by government policy support and market demand, India's semiconductor market is valued at $45 billion in 2023 and is expected to grow rapidly at a CAGR of 13% to exceed $100 billion by 2030. The Indian government has also launched a number of incentive schemes, such as the Production Linked Incentive (PLI) scheme, to attract domestic and foreign companies to invest in the semiconductor industry in India.
Figure: India is actively deploying the semiconductor industry
2. Advantages and complementarity of all parties to the cooperation
(1) Tata Electronics
Tata Electronics is a subsidiary of India's Tata Group, focusing on the electronics value chain including assembly, packaging and testing, wafer fabrication and design. In the assembly process, Tata Electronics acquired Wistron's Indian factory and entered the Apple industry chain; In the packaging and testing process, the company currently has a factory in operation and a factory under construction; In the wafer manufacturing process, Tata Electronics announced in March 2024 that it would cooperate with PSMC to build a 12-inch wafer factory, with a total investment of 11 billion US dollars, which is expected to be mass-produced in the fourth quarter of 2026, with a monthly production capacity of 50,000 wafers, covering 28nm, 40nm, 55nm, 90nm, 110nm and other mature nodes. Tata Electronics has strong capabilities and extensive experience in the field of electronics manufacturing services in India, and is able to provide a solid manufacturing foundation and local service support for collaborative projects.
(2) PSMC
As a wafer foundry in Taiwan, PSMC has significant advantages in semiconductor manufacturing technology. Its advanced semiconductor process technology can provide strong technical support for India's local semiconductor production, which will help improve India's technical level and competitiveness in the field of semiconductor manufacturing. The technology licensing cooperation between PSMC and Tata Electronics in the construction of the wafer fab has laid the foundation for further deepening the cooperation between the two parties.
(3) Himax Technologies
Himax Technologies is a world-renowned display IC design company and ultra-low power AI intelligent sensing solution provider. Its expertise and experience in the field of display technology enable it to bring high-performance display semiconductor products to the Indian market. The combination of Himax Techbologies 's IC design expertise with Tata Electronics' electronics manufacturing services and PSMC's semiconductor manufacturing process technology will help build a complete ecosystem of display and ultra-low-power AI sensor products and technologies in India.
3. The significance and prospects of cooperation
(1) Promote the independence of India's semiconductor industry
India is relatively weak in the upstream links of the semiconductor value chain, such as chip design and manufacturing. This cooperation will help to make up for India's shortcomings in these areas and enhance India's autonomy in the semiconductor field. By integrating the advantages of all parties and building a complete semiconductor ecological chain, India is expected to play a greater role in the global semiconductor market, reduce its dependence on imported chips, and enhance the resilience of the supply chain.
(2) Meet market demand and expand the global market
With the rapid development of emerging technologies such as artificial intelligence and the Internet of Things, the demand for ultra-low-power AI sensors and display technologies is showing a rapid growth trend. As one of the world's fastest-growing economies, India's demand for semiconductor products is also rising. The tripartite cooperation will not only meet the needs of the local Indian market, but will also help to expand the global market. India's semiconductor consumption is forecast to increase from $22 billion in 2019 to $64 billion in 2026, at a CAGR of 16%. The high-performance semiconductor products produced by the joint project will have the opportunity to enter the global supply chain, bringing new development opportunities to the Indian semiconductor industry.
(3) Promote technological progress and innovation
At the technical level, the tripartite cooperation will drive India's technological advancements in the field of display technology and ultra-low-power AI sensors. The combination of Himax Technologies IC design technology, PSMC's semiconductor manufacturing process and Tata Electronics' experience in electronic manufacturing services will inject new vitality into technological innovation in India's semiconductor industry. For example, Himax Technologies' innovation in display IC design can bring more advanced technical solutions to India's display industry, improving product performance and competitiveness.
4. Challenges and responses
Despite the promise of cooperation, India also faces some challenges in developing its semiconductor industry. First of all, India's semiconductor ecosystem is still in its infancy, and the relevant infrastructure and industrial chain are not yet perfect. Secondly, India is relatively lagging behind in semiconductor technology research and development, and it needs to further strengthen talent training and R&D investment. In addition, the global semiconductor market is highly competitive, and India needs to continuously improve its competitiveness in terms of quality and cost. To address these challenges, the Indian government needs to continue to increase its support for the semiconductor industry, improve infrastructure construction, and attract more domestic and foreign investment and technology transfer. At the same time, Indian companies also need to strengthen their technological innovation capabilities, improve product quality and production efficiency, and occupy a place in the fierce market competition.
5. Conclusions
The cooperation between Tata Electronics, PSMC and Himax Technologies is an important attempt by India in the field of semiconductor industry. By integrating the advantages of all parties and building a complete semiconductor ecological chain, India is expected to play a greater role in the global semiconductor market. This cooperation will not only promote the development of India's semiconductor industry, but also contribute positively to the diversification and resilience of the global semiconductor supply chain. However, India still faces many challenges on the road to the development of the semiconductor industry, which requires the joint efforts of the government, enterprises and all parties in society, continuous investment and innovation, in short, to the sustainable development of the semiconductor industry, to truly realize the rise of "Made in India" in the semiconductor field, there is still a long way to go.
