Intel has reached a strategic agreement with Tata Electronics to build the country’s first large-scale semiconductor manufacturing plant in India, along with an assembly and test (OSAT) facility. Valued at approximately $14 billion, the operation strengthens New Delhi’s ambition to become a key player in the global chip supply chain and aligns with Intel’s strategy to relaunch its foundry business after several challenging years.
According to information leaked by Reuters and reported by various financial media, the project involves two major components:
- A wafer fabrication plant (fab) in the state of Gujarat, which will be the first large-scale facility of its kind in India.
- An OSAT plant (assembly, packaging, and testing) in the state of Assam, crucial for completing the domestic manufacturing cycle.
While specific process technologies to be used have not been publicly disclosed, all indications point to mature and advanced nodes, designed for both consumer electronics and AI workloads or data centers in the medium term.
An oxygen boost for Intel’s foundry business
The agreement comes at a delicate time for Intel. The company has been experiencing losses over several fiscal years, along with significant cutbacks and delays in some of its major industrial initiatives. The appointment of Lip-Bu Tan as CEO in 2025—an industry veteran with experience at Cadence and venture capital—has been interpreted as an effort to accelerate the shift towards its foundry business and regain competitiveness against TSMC and Samsung.
For Intel Foundry, partnering with Tata Electronics offers several advantages:
- Shared investment: Part of the substantial initial cost of the plant will be borne by the local partner, reducing pressure on Intel’s balance sheet.
- Access to a growing market: India ranks among the fastest-growing countries for PCs, smartphones, and digital services, and the government aims to generate a portion of that value domestically.
- Geographical diversification: In a context of geopolitical tensions and “friend-shoring,” establishing manufacturing capacity in India is a strategic move to mitigate potential disruptions elsewhere.
Additionally, this move aligns with Intel’s technological roadmap, which includes deploying advanced processes like Intel 18A and, later, 14A. Although the exact node for the Gujarat plant has not been confirmed, the company needs volume across all manufacturing tiers to make its large-scale foundry model profitable.
India aims to establish its presence in the global semiconductor map
The other major beneficiary of the deal is India. Since 2021, Narendra Modi’s government has been pushing the so-called India Semiconductor Mission (ISM), an incentive program designed to attract chip factories, packaging plants, and design centers to the country, reducing reliance on foreign supply in a critical component of the digital economy.
Until now, India was mainly a large consumer of electronics and a software development hub, with limited industrial capacity in the hard segments of the value chain. The entry of Intel and Tata changes that landscape:
- First large domestic fab: a move from talk to action, with investments measured in tens of billions of dollars.
- More resilient supply chain: combining fab and OSAT facilities within the country reduces exposure to external bottlenecks in assembly and packaging.
- Ripple effect: projects like this tend to attract suppliers of materials, equipment, specialized logistics, and local technical talent development.
However, no industry insiders expect immediate results. Building a semiconductor factory from scratch typically takes at least 3 to 5 years and involves overcoming challenges related to stable power supply, ultrapure water, transportation infrastructure, and a highly skilled local workforce.
A decade-long project, not a quarterly one
Intel’s recent history demonstrates that such initiatives are marathons, not sprints. The company has had to reevaluate or slow down investments in other regions, such as new factories in Ohio (USA), partly due to the high costs and complexity of launching new plants amid a changing market environment.
In India, the challenges are doubled:
- The country aims to leap multiple levels on the technological ladder,
- And Intel needs the project to be cost-competitive and performant compared to its major rival, TSMC, which continues to dominate the global foundry market.
Nevertheless, the partnership with Tata sends clear signals:
- India is serious about becoming a semiconductor manufacturing hub, not just a software and services center.
- Intel is willing to share risks and partner with large local conglomerates to strengthen its presence in key markets.
- The geopolitics of semiconductors is becoming multipolar, with new production nodes emerging outside the traditional US–Europe–East Asia axis.
If everything proceeds according to plan, the Gujarat fab and Assam OSAT plant could become operational within the next decade, representing a significant pillar of India’s industrial strategy and Intel’s foundry revival plan.
Frequently Asked Questions
What exactly is a semiconductor “fab”?
A fabrication plant where silicon wafers are processed through photolithography and dozens of deposition, etching, and doping steps. These facilities are extremely expensive and complex, often exceeding $10 billion per state-of-the-art manufacturing plant.
What is OSAT and why is it important?
OSAT stands for Outsourced Semiconductor Assembly and Test. These plants cut wafers into individual chips, encapsulate them, and perform electrical and reliability testing. Without this phase, chips can’t be integrated into final products; thus, having an in-house OSAT capability is key to building a more controlled supply chain.
Will the factory in India use Intel’s most advanced processes (18A, 14A)?
No public details have been shared yet about the process nodes to be fabricated in India. Typically, new country setups start with more mature technologies, gradually progressing toward advanced nodes as the local ecosystem matures, depending on client demand and government incentives.
When could Intel and Tata’s plant in India be operational?
These projects usually require several years from announcement to volume production. Factoring in civil works, equipment installation, process validation, and customer certification, it’s unlikely the factory will reach full capacity before the late 2020s.