ASML will supply machines to Tata Electronics for India’s first chip factory using 300mm wafers, located in the town of Dholera, south of nearby Ahmedabad. TSMC and Intel need not worry for now about a new rival at the bleeding edge, however. The partnership focuses on mature—and thus not the most advanced—manufacturing processes.
The memorandum was signed in the presence of Indian Prime Minister Narendra Modi and Dutch PM Rob Jetten. Tata Electronics plans to build India’s first 300mm-wafer chip factory in Dholera, Gujarat. ASML will supply the lithography machines for this project. It will also assist in getting the factory up and running, including staff training.
The investment in the factory amounts to approximately 9.5 billion euros, a typical amount for a new chip factory. Tata Electronics is part of the Tata Group, which also owns Tata Steel in the Netherlands, with a large facility in IJmuiden.
Tata Electronics is relatively young
Tata itself dates back to 1868, but Tata Electronics was founded in 2020. It is one of the youngest chip manufacturers and a greenfield venture within Tata, even though it already counts Apple, among others, as a customer. An acquisition of the Indian branch of Wistron (2024) and a majority stake in Pegatron India (2025) have already contributed to its growth.
The Taiwanese company PSMC (Powerchip Semiconductor Manufacturing Company) has already provided expertise and what’s known as technology transfer. Although a major investment is required to acquire ASML equipment and other assets, the ability to efficiently manufacture chips is based just as much on strict guidelines as on trade secrets within fabs, or chip factories.
28nm and 40nm: not the latest generation
Tata is keeping its ambitions relatively modest for now. It is gearing the factory toward 28nm and 40nm processes. These are older production processes. In other words: not state-of-the-art chips, but processors that are widely applicable in automotive, industrial systems, and consumer electronics. The factory is thus targeting a market segment where demand is high, even without the most advanced lithography.
ASML can always use a more diverse customer base. Despite geopolitical uncertainty, the company has shown strong growth in recent quarters. For instance, ASML reported record revenue of 13.2 billion euros in Q4 2025 earlier this year, partly driven by sustained demand for AI chip manufacturing.
The deal with Tata targets a different segment. For mature processes, only DUV machines are required. ASML is, however, expanding its presence in a region where EUV capacity may eventually emerge. Admittedly, this would be years in the future and only if EUV machines are no longer used for the latest AI chip designs.
Dholera: smart city as a chip hub
Dholera is, in any case, a hub for India’s future chip plans. The local government aims to transform the town into a so-called smart city, featuring modern water management and advanced infrastructure. The chip factory serves as an anchor for this initiative. Dholera has also been granted Special Economic Zone status for semiconductors, offering tax incentives and expedited permitting.
The project falls under India’s version of the Chips Act, known as the Semiconductor Mission and closely linked to the Make in India plan. The Tata-ASML deal thus has a rich history.