This is how India prepares its next big leap in the chip industry

When we think about making chips, India is not usually the first country that comes to mind. We think of Taiwan, South Korea, the United States or China, but India often appears in another box: that of software, technological services or the assembly of electronic products. Precisely for this reason this movement is interesting. We are witnessing firsthand how a huge country seeks to advance towards one of the deepest and most difficult parts of the technological chain.

The announcement is supported by a very specific alliance: Tata Electronics and ASML have signed a memorandum of understanding for the future Dholera semiconductor plant in Gujarat. The facility, which the release presents as India’s first 300mm commercial factory, has a planned investment of 11 billion dollars and will be aimed at producing semiconductors for a wide range of sectors. The agreement, Reuters points outwas signed on May 16 during Narendra Modi’s visit to the Netherlands, also attended by Dutch Prime Minister Rob Jetten.

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The news comes accompanied by some interesting technical data that is worth analyzing carefully. The 300 mm figure may sound like a measurement of the chip, but it actually talks about the silicon wafer on which the semiconductors are manufactured, indicating the diameter of that circular surface, not the size of the transistors or the size of the final chips. It is a standard industrial platform for large-scale production, because it allows working with many units on the same wafer before cutting them and taking them to the next phases of the process.

Furthermore, the statement places the Tata collaboration with PSMCPowerchip Semiconductor Manufacturing Corporation, as the gateway to a technology portfolio that includes 28nm, 40nm, 55nm, 90nm and 110nm. That list helps land the project much better than the 300 mm label, because it tells us which process families the plant plans to handle. In practice, we talk about analog and logic chips for automotive, mobile devices, consumer electronics, connectivity, IoT, embedded memory and other industrial uses.

This is precisely where the Dutch company occupies a central position in the semiconductor industry. Their contribution does not simply consist of “setting up machines”, but rather supporting the start-up of the factory with lithography tools and solutions, the phase that allows the circuit patterns to be transferred to the silicon wafers. ASML also speaks training local talent, supply chain resilience and R&D infrastructure. It is a way to accompany Tata not only in the purchase of equipment, but in the industrial learning necessary for the plant to scale.

ASML is known for its most sophisticated machines, but that doesn’t mean every deal of yours involves EUV either High-NA EUV. In this case, the available information speaks of lithography solutions for a process-oriented plant that they do not belong to the most advanced frontier. With these data, and in the absence of ASML detailing what specific systems it will supply, the most prudent reading is to place the project in the field of lithography DUV and the support ecosystem that allows stable production.

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This agreement comes at an interesting time for the Dutch company. ASML continues to occupy a central position in the sector, but the adoption of its most advanced technology is not being uniform among its large clients: TSMC, for example, continues to evaluate High-NA EUV, although for now it prefers to rely on current EUVs and process improvements rather than assume the cost and complexity of the new generation. Its executive Kevin Zhang summed it up with a very clear phrase: “I like the technology, but not the price.” In this context, an alliance like Tata’s reminds us of something important: the Dutch firm not only stands out for its most extreme machines, but also for its ability to accompany factories in different stages of industrial maturity.

Reuters places the agreement in a broader context than that of a single factory. India has pledged billions of dollars in subsidies to attract semiconductor plants and related manufacturing, with eight projects underway, while Modi has encouraged Dutch companies to invest in areas such as semiconductors, renewable energy, digital technologies and health. At the same time, Dutch companies in the sector look for new markets and more geographical diversification in a scenario marked by export controls and trade restrictions linked to technological rivalry between the United States and China.

As we can see, the move does not put India, at least for now, at the top of the semiconductor industry, but it does bring it closer to manufacturing chips at scale with proven processes and sustained demand. That difference matters. The industry does not only live on the most advanced semiconductors, but also on a huge base of components present in devices that surround us, such as everyday electronics and the automotive industry, as well as those that play in another field, such as industrial systems.

Images | Tata Electronics | ASML

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