Following the effective spin-off of Nexperia from its Chinese owner Wingtech, the Dutch chip manufacturer has set its sights on India. Tata Electronics will handle production and packaging in that country for Nexperia, including through a 300mm fab in Dholera and a packaging facility in Assam.
The announcement came last week from the Nijmegen-based company and Tata in New Delhi. The partnership has three components: front-end wafer fabrication, back-end assembly (and associated testing), and joint development of the underlying technology. The latter extends to an entire ecosystem of partners and suppliers for Nexperia chips.
For wafer production, Nexperia will use Tata’s factory in Dholera, Gujarat, however, this facility is still under construction. According to Reuters, Nexperia’s deal with Tata is a definitive sign of a break with Wingtech, which was forcibly cut off from Nexperia by the Dutch government late last year due to alleged risks of valuable IP leaking out of Europe.
Why Nexperia is looking elsewhere
That rift began exactly one year ago, when the Dutch government intervened with exceptional sanctions. China was furious and imposed an export ban on chips from the factory in Dongguan, leaving automakers, who rely heavily on Nexperia chips for specific components, without the necessary parts. Both countries later reversed their measures.
The consequences will be felt for a long time to come. Wingtech is demanding one billion euros in damages from Nexperia, and in late August , a Chinese judge froze approximately 270 million euros worth of Nexperia’s interests in four Chinese subsidiaries. About 70 percent of the company’s chips are packaged in China.
Dholera to become India’s first commercial fab
Tata is investing $14 billion in the two locations. The majority of that will go toward building the facility in Dholera. The fab is expected to rely on 450 suppliers.
Tata signed seven agreements with other parties, including Fujifilm and the Dutch company Besi. The company now has sixteen agreements in place in Europe, Japan, Singapore, and India. No date has been set for the start of production in Dholera. CEO Randhir Thakur said that both Dholera and Assam are on schedule, but the construction of chip facilities is notorious for frequent delays.