Tata reportedly scouting land for third plant for EMS and OSAT business

Jingyue Hsiao, DIGITIMES Asia, Taipei 0

Credit: AFP

Tata Electronics is reportedly looking for land to set up a new factory in southern India as the electronics venture by Tata Group slowly forays into the handsets and semiconductor manufacturing business.

The Economic Times quoted sources saying that Tata is scouting for another location in Coimbatore, Tamil Nadu, potentially planning to set up the third plant in the state. Sources also told The Economic Times that Tata might expand its electronics business into component manufacturing or assembly and OSAT business besides iPhone manufacturing.

Following setting up Tata Electronics, the greenfield venture of Tata Group in the electronics business, in April 2020, Tata first announced its ambition in the semiconductor manufacturing business in August 2021. Tata Sons chairman N Chandrasekharan said in May 2022 that the group planned to invest US$90 billion in new industries such as mobile components, semiconductors, EVs, batteries, renewables, and e-commerce by 2027.

In the second half of 2022, rumors surfaced that Tata had been talking with Wistron about the iPhone manufacturing business. Wistron's talk with Tata was reportedly underway. According to Trendforce, Tata has received 5% of orders of iPhone 15 and iPhone 15 Pro, which is expected to be launched later in the year.

In the semiconductor business, Tata announced that Randhir Thakur, former head of Intel Foundry Services, joined Tata Electronics as the company is looking to foray into the OSAT business.

An unnamed Indian government official told The Economic Times that Tata is expected to proceed cautiously and gain a thorough understanding of the market before making any major moves. Tata has signed an MoU with the government of Tamil Nadu to set up a manufacturing facility and is taking over Wistron's plant in Karnataka, which means the Coimbatore facility, if set up, will be Tata's third plant for its electronics business.

Despite being a major conglomerate in India, Tata is inexperienced in electronics manufacturing. Financial Times reported earlier that the yield of iPhone cases that Tata made was only about 50%. The Economic Times also reported that iPhones and iPhone parts had to be re-exported and re-imported several times for Tata to assemble before sending them back to China for final assembly.