ASML & Tata: Semiconductor Manufacturing in India

Tata Electronics and ASML have signed a memorandum of understanding to advance India's semiconductor manufacturing ecosystem.

Through the partnership, ASML is set to support the establishment and growth of Tata's upcoming US$11bn 300 mm semiconductor fab in Dholera, Gujarat.

ASML's suite of advanced lithography tools and solutions will be deployed at the facility alongside cooperation to develop domestic talent, supply chain and research initiatives. 

Christophe Fouquet, President and CEO of ASML, says: “India’s rapidly expanding semiconductor sector represents many compelling opportunities, and we are committed to establishing long-term partnerships in the region.

"We believe Tata Electronics is strongly positioned to realise its ambitions in expanding semiconductor capabilities.

"We are pleased and honoured to contribute our technological expertise and to help nurture talent in India.”

About Tata's Dholera foundry

Tata describes its new Indian foundry as a "state-of-the-art, AI-enabled" fab with a planned total investment of US$11bn.

It is expected to have a total monthly capacity of 50,000 wafers for Analog and Logic IC chips based on 28 nm to 110 nm technologies.

The facility is being built with Taiwan-headquartered PSMC, the world's seventh-largest contract chipmaker, giving it access to a broad technology portfolio.

Dr. Randhir Thakur, CEO and Managing Director of Tata Electronics, says: “We are excited to partner with ASML, a company known for its innovation and leadership in lithography, and for enabling semiconductor customers globally.

"ASML’s deep expertise in holistic lithography solutions will ensure the timely ramp of our Fab in Dholera, create a resilient and trusted supply chain for our global customers, drive innovation and develop talent locally.

"This foundational partnership with ASML brings a shared commitment to the highest standards of quality, yield and manufacturing excellence, and it will go a long way in building a strong semiconductor ecosystem in India.”

Semiconductor manufacturing in India

India Semiconductor Mission (ISM) is an agency under the country's Ministry of Electronics and Information Technology dedicated to boosting domestic electronics manufacturing.

It was launched in 2021 and offers up to 50% central subsidies for approved projects.

ISM has approved 12 semiconductor projects so far with a cumulative investment of more than ₹1.64 lakh crore (US$17bn).

Including Tata's new fab, Gujarat will be home to seven key projects from companies including Micron Technology and Renesas.

ISM 2.0 was launched in February 2026 to build on the original programme, focussed on local equipment manufacturing, full-stack Indian IP design and supply chain localisation. 

Semiconductor supply chains

Semiconductor production is one of the most complex and geographically dispersed supply chains in the world, making onshoring a big task.

Design and IP is dominated by the US with companies like NVIDIA, AMD and Qualcomm. 

Manufacturing is heavily concentrated in East Asia, with TSMC and Samsung leading fabrication of advanced chips. 

The machinery required to make chips is monopolised by just a few countries, with ASML being the sole provider of extreme ultraviolet lithography and Japan and the US providing other critical machinery and chemicals. 

Assembly, testing and packaging is often offshored to Southeast Asia and China for lower labour costs. 

With geopolitical risks high for semiconductors, shortages could put many sectors at risk. 

The "China plus one" strategy is being implemented by some tech giants looking to diversify their manufacturing bases away from China. India's work to develop semiconductor manufacturing could position it as a viable and stable alternative. 

India is also one of the world's largest consumers of electronics, so domestic production could reduce import costs alongside supporting the country's growth.

The challenges in onshoring semiconductors

Fabs require enormous upfront capital, like Tata's US$11bn investment. 

Technology also becomes obsolete quickly, usually losing value within five years due to rapid advancements in performance, power reduction and miniaturisation. This requires continuous investment in R&D. 

The infrastructure needs of a fab are extreme too, with a flawless supply of electricity needed to keep wafers perfect. 

While India has software engineers and chip designers, it currently lacks the highly specialised mechanical, chemical and materials engineers needed for the physical manufacturing and maintenance of lithography equipment. 

ASML's work with Tata will aim to develop talent in the country.