Analog Devices, Tata Group in talks to make semiconductors in India

BENGALURU (Reuters) – Analog Devices (NASDAQ:ADI) and Indian salt-to-aviation conglomerate Tata Group have signed a pact to explore making semiconductor products in India, the U.S. chipmaker said on Wednesday.

Tata Electronics, the electronics-manufacturing arm of the 156-year-old group, is investing a total of $14 billion to build India’s first semiconductor fabrication facility in Gujarat state and a chip-assembly and testing facility in the state of Assam.

Construction of the Tata Group’s semiconductor plant was greenlit by India earlier this year.

Tata Electronics and ADI intend to explore opportunities to manufacture ADI’s products in Tata Electronics’ fab in Gujarat and the facility in Assam, Analog Devices said in a statement.

Prime Minister Narendra Modi has been pushing for India to rival global semiconductor powerhouses such as Taiwan, aiming to make the country a chipmaker for the world despite initial setbacks.

Earlier this month, India’s western state of Maharashtra said Adani Group and Israel’s Tower Semiconductor (NASDAQ:TSEM) would invest $10 billion for a chip project. Infrastructure major Larsen & Toubro’s semiconductor unit, which designs chips for vehicles, also plans to eventually build a factory.

Under the deal with ADI, Tata will also use the chipmaker’s products in Tata Motors (NYSE:TTM)’ electric vehicles and Tejas Networks’ telecom infrastructure, the companies said.

The companies did not specify what products would be made in India or what products would be used by Tata.

Global companies including NXP Semiconductors (NASDAQ:NXPI) and Micron (NASDAQ:MU) have announced plans to invest and establish facilities in the country.