Intel partners with Tata to build India’s first megachip factory for $14 billion

Intel has reached a strategic agreement with Tata Electronics to build India’s first large-scale semiconductor manufacturing plant, along with an assembly and testing (OSAT) facility. The deal, valued at approximately $14 billion, reinforces New Delhi’s commitment to becoming a key player in the global chip supply chain and aligns with Intel’s strategy to revitalize its foundry business after several challenging years.

According to information first reported by Reuters and subsequently picked up by various business media outlets, the project comprises two main components:

– A wafer factory (fab) in the state of Gujarat, which will be the first large-scale facility of its kind in India.

– An OSAT (assembly, packaging, and testing) plant in the state of Assam, crucial for completing the production cycle within the country.

Although the specific process technologies to be used have not yet been made public, all indications point to mature and advanced nodes, designed for both consumer electronics and, in the medium term, artificial intelligence and data center workloads.

A lifeline for Intel’s foundry business

The agreement comes at a delicate time for Intel. The company has been experiencing losses for several years, facing significant cost-cutting measures and delays in some of its major industrial projects. The appointment of Lip-Bu Tan as the new CEO in 2025—an industry veteran with experience at Cadence and in venture capital—has been interpreted as an attempt to accelerate the shift towards the foundry business and regain competitiveness against TSMC and Samsung.

For Intel Foundry, the alliance with Tata Electronics offers several advantages:

– Shared investment: Part of the factory’s enormous initial cost is borne by the local partner, reducing pressure on Intel’s balance sheet.

– Access to an expanding market: India is one of the fastest-growing countries in PCs, smartphones, and digital services, and the government wants a portion of that value to be generated domestically.

– Geographic diversification: In a context of geopolitical tensions and friend-shoring, having production capacity in India is an additional strategic asset against potential disruptions in other regions.

The move also aligns with Intel’s technology roadmap, which includes the implementation of advanced processes such as Intel 18A and, later, 14A. Although the specific location of the Gujarat plant is not yet confirmed, the company needs volume at all stages of its manufacturing process to make its large-scale foundry model profitable.

Source: www.revistacloud.com