Tata Electronics Eyes Malaysian Semiconductor Acquisition to Accelerate India’s Chip Ambitions

Tata Electronics is reportedly exploring the acquisition of a chip fabrication or outsourced semiconductor assembly and test (OSAT) facility in Malaysia.

Tata Electronics has initiated talks with multiple Malaysian semiconductor companies—including X-Fab, DNeX, and Globetronics—for a potential acquisition.

The goal: to acquire operational assets with established infrastructure, skilled personnel, and proven processes to serve as a launching pad for Tata’s upcoming semiconductor projects in India.

This international push is not limited to hardware assets. Tata has already sent hundreds of engineers and staff to Taiwan for intensive semiconductor training gaining expertise across fabrication, packaging, and testing domains. This human capital investment is expected to help bridge the skill gap as India ramps up its local chip production.

India’s Semiconductor Ecosystem Takes Shape

Tata Electronics is a major beneficiary of the Indian government’s $10 billion semiconductor incentive program. Its planned $11 billion semiconductor fab in Dholera, Gujarat—developed in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corp (PSMC)—will focus on mature nodes (28nm and above), with production expected to begin by 2026.

The company is also developing a ₹27,000 crore OSAT facility in Jagiroad, Assam, aimed at packaging technologies such as flip-chip and wire-bond. Partnerships with global players like Synopsys and ASMPT are further supporting Tata’s efforts to bring design and testing capabilities into the Indian fold.

Malaysia is a global hub for chip assembly and testing, offering a highly skilled workforce and robust supply chain networks. By acquiring a facility there, Tata can:

• Gain immediate operational expertise and IP
• Transfer knowledge and best practices to India
• Reduce setup time for its upcoming domestic facilities
• Create a globally integrated manufacturing footprint

The move also reduces the execution risk involved in building a semiconductor business from scratch, offering Tata the rare opportunity to build and scale operations with both local and global components.

Tata Electronics’ strategy of combining international acquisitions with domestic capacity building could become a blueprint for other Indian conglomerates entering the semiconductor space. If finalized, the deal would significantly bolster India’s ability to compete in the global semiconductor market—moving the country one step closer to becoming a reliable hub for chip manufacturing and innovation.