PSMC Chairman: First Chip From Dholera Plant Expected by End of 2026

What PSMC's Chairman Said

The first semiconductor chip from the upcoming plant in Gujarat's Dholera, jointly established by Tata Group and Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC), is projected to have its inaugural chip ready for production by the end of 2026. PSMC chairman Frank Huang, in an interview to the business daily, said that the upcoming semiconductor fabrication with Tata Group in Dholera will begin by manufacturing 28 nanometer chips.

Current Construction Status

Construction of the fabrication facility began in 2024 and has progressed rapidly. As of April 2026, the project has reached 50% completion. Foundation work is finished, and the facility is now transitioning into its most technically demanding phases — cleanroom installation, equipment integration, and process calibration. Trial production is targeted for late 2026 — specifically around December 2026, as confirmed by Dr Randhir Thakur, CEO and Managing Director of Tata Electronics.

The Facility and Its Products

The chip fabrication plant will produce power management ICs, display drivers, microcontrollers, high-performance compute chips for artificial intelligence and automotive electronics chips, starting at 28nm process nodes.

With this Fab, India for the first time will be able to address the growing chip demand of domestic and global customers across automotive, computing, communications, and artificial intelligence markets.

Why This Timeline Matters

To keep this schedule on track, Tata Electronics has signed a landmark agreement with Dutch lithography giant ASML for a suite of advanced holistic lithography solutions. Given the 18 to 24 month lead times typical for lithography scanners, securing ASML's technology now is critical for meeting the 2026 target.

The Tata fab sits at the fabrication tier — the most complex and capital-intensive segment of the semiconductor value chain. Its success demonstrates that India can credibly host full-scale chip production, not just assembly and testing.

Jobs and Ecosystem Impact

Phase 1 is expected to create 20,000+ direct skilled jobs. Including indirect employment in services, retail, education, and hospitality, the total employment impact is estimated at 60,000–100,000 people over the next 5–7 years.

Additionally, INOX Air Products has begun constructing a specialty gas facility in Dholera to supply ultra-high-purity gases to the Tata fab — a sign that the broader semiconductor ecosystem around Dholera is already taking shape.

Government Support and Subsidies

The project benefits from 50% capital subsidies from the central government under India Semiconductor Mission, plus an additional 40% capital subsidy, land subsidies, and infrastructure support from the state government, offering up to 40% capital subsidy on top of central-level backing, full reimbursement of stamp duty and registration fees, discounted power and water tariffs, and up to 75% land subsidy for the first 200 acres in Dholera's designated "Semicon City" zone, alongside fast-track clearances.

Gujarat Budget 2026: ₹610 crore for Dholera trunk infrastructure (Phase 1), including airport-enabling infra, modern roads, water supply, and ICT systems. Budget 2026 (Union): ₹40,000 crore allocated for semiconductor manufacturing and allied ecosystem development across India — Dholera is the primary beneficiary.

What Comes Next

The first operational phase of Assam OSAT is expected by mid-to-late 2025, beginning chip assembly and testing to serve India's growing electronics manufacturing sector. The Dholera fab is expected to produce its first commercial chips by late 2026. The Assam OSAT facility is expected to scale in parallel for both domestic and international markets. By 2027, production at Dholera is expected to stabilise and scale further.