India's semiconductor localization has so far been symbolized by the front-end fab in Dholera, Gujarat. From a procurement and design perspective, however, the layers taking shape with more immediate substance are back-end assembly and test, or OSAT, and chip design. A large front-end fab takes time to reach mass production, while back-end and design activities are already entering operation and track-record phases.
India's First Assembly and Test Facility Is Being Built in Assam
Tata Electronics is building India's first indigenous semiconductor assembly and test facility in Jagiroad, Assam. The investment is Rs 27,000 crore, or more than $3 billion, and the site spans 171 acres. According to the Indian government, the facility, TSAT, is expected after ramp-up to have capacity of up to 48 million chips per day and to support more than 27,000 direct and indirect jobs.
Front-end fab under construction; mass production targeted for 2028
Back-end OSAT under construction
First back-end OSAT site, operating since December 2023
The facility is planned to operate entirely on renewable energy and serve global customers in AI, automotive, mobile, and industrial applications. The way back-end site selection is designed around both power procurement and customer geography is a pattern common to recent OSAT investment.
Packaging Technology Is Built Around Three Axes
Wire Bond
Wire bonding is a mature, cost-efficient technology that covers a broad range of automotive and industrial volume products.
Flip Chip
Flip chip targets applications requiring high density and high heat dissipation. Demand is growing in high-performance power and logic implementation.
ISP, Integrated System Packaging
Integrated system packaging combines multiple chips into one package. Tata says the direction includes expansion toward TSV.
Tata's back-end effort is not only conceptual. Its first OSAT facility in Vemgal, Karnataka, began operations in December 2023, and Jagiroad is the expansion phase. Having an existing operating site gives a different level of visibility into the production ramp curve than a front-end fab that is still before mass production.
The Design Ecosystem Is Also Gaining Depth
Alongside back-end manufacturing, India is building a track record in design. Under India's DLI, or Design Linked Incentive, scheme, 24 chip design projects are under way in strategic fields.
According to the Indian government, these projects have achieved 16 tape-outs, six ASIC conversions, and 10 patents. Design can account for up to 50% of chip value and 20-50% of BOM cost, making it an entry point for capturing value even without owning manufacturing equipment. The fact that India is thickening both manufacturing, in the back end, and design at the same time is one of the defining features of the current phase.
What This Means for Procurement and Design
While the Dholera front-end fab targets mass production in 2028, back-end and design already have tangible ramp-up activity. That difference matters for supply chain planning. OSAT has historically been concentrated in Taiwan, Southeast Asia, and China, but India may join that option set over the medium term.
For companies considering geographic diversification in their supply chains, India's OSAT ramp should be tracked on a different timeline from the progress of front-end fabs. India's move to internalize front-end, back-end, and design together is worth monitoring as a factor that could redraw procurement maps over the medium term.
Sources
- Tata Electronics — Building the nation's first indigenous semiconductor assembly and test facility in Assam
- Tata Electronics — OSAT business
- ASML — Strategic partnership with Tata Electronics
- Press Information Bureau — TSAT assembly and test facility in Assam
- Press Information Bureau — DLI scheme and chip design