According to reports, the government has received 70 applications for its project to manufacture electronics components worth INR 22,919 Cr. The development was confirmed by Union Minister Ashwini Vaishnaw, who also noted that small and medium-sized businesses make up the majority of the applications.
Vaishnaw informed a news source that the plan to manufacture electronics components has been well appreciated. About 70 applications have been received in the 15 days after the application was opened.
This production-linked incentive (PLI) programme for non-semiconductor electronics components was approved by the union cabinet in March. The plan is to draw in INR 59,350 Cr in investment, which will lead to INR 4,56,500 Cr in output and the creation of 91,600 new direct jobs in addition to numerous indirect positions. With a one-year gestation period, the system has a six-year duration.
A portion of the incentive’s payout is also correlated with meeting employment goals. The government stated when the plan was approved that it offers Indian manufacturers unique incentives designed to help them overcome particular obstacles for different types of parts and sub-assemblies, enabling them to develop technological capabilities and realise economies of scale.
Scheme will Benefit Various Sector
The initiative is expected to help industries like telecommunications, consumer electronics, automotive, and medical devices. Vaishnaw also announced last month that the scheme’s online portal would soon be activated and that the guidelines had been finalised.
Global manufacturers Foxconn, Tata Electronics, Zetwerk, and Dixon are reportedly considering investments in India via the PLI scheme, despite the fact that the initiative’s investors have not been made public. These multinational corporations are planning their manufacturing hubs in collaboration with various states.
For example, Foxconn, Apple’s biggest contract manufacturer, has already established a display module assembly facility in Tamil Nadu and begun conducting trial runs. Additionally, the “Tamil Nadu Electronics Components Manufacturing Scheme (ECMS)” was introduced a few weeks ago by Tamil Nadu Chief Minister MK Stalin. This plan seeks to create 60,000 jobs in the state and draw in investments of INR 30,000 Cr.
Gujarat and UP Scaling Up Efforts to Lead the Race
According to various media reports, Gujarat and Uttar Pradesh are also vying to become major centres for the production of electronics. Uttar Pradesh is working on a draft policy that might be finished in a few weeks, while Gujarat has presented a draft policy to encourage and expand the manufacturing of electronics components.
Finance Minister Nirmala Sitharaman stated during her 2025–2026 budget speech that the government is prepared to provide the local electronics equipment industry with a much-needed boost. India produced electronics worth INR 9.52 Lakh Cr in FY24 compared to INR 1.90 Lakh Cr in FY15, according to the Economic Survey 2024–25.
At its Hosur facility, Tata Electronics is dramatically increasing the volume of enclosures it produces for Apple’s iPhones. According to a media report, Tata Electronics wants to triple its current capacity of about 50,000 enclosures.
The ramp-up will probably occur before Apple’s annual product introductions, which happen in September. This is the second phase of the Hosur facility’s build-out. Before the fire that occurred at the facility in September of last year, Tata Electronics had reached a capacity of roughly 50,000 enclosures, according to the article.
This setback prompted the company to halt its rapid expansion. After the fire, it took them a while to get back on track. However, the capacity has returned to its pre-fire levels.
India to Become iPhone’s Manufacturing Hub
The expansion drive by Tata Electronics follows recent remarks by Apple CEO Tim Cook that India will take over as the main location for iPhone production for US-sold devices. During Apple’s Q1 earnings call on May 1, Cook stated that the company anticipates that the majority of iPhones sold in the US will be made in India during the June quarter.
He went on to say that practically all iPad, Mac, Apple Watch, and AirPods items sold in the US would be made in Vietnam. With his statement regarding India, Cook signalled a dramatic change in the Cupertino-based company’s production approach and solidified the notion that Apple was, in fact, seeking to diversify its supply chain away from China.
Apple’s Indian vendors are doing all in their power to seize this chance.
Apple Moving Away for China
Tata Electronics announced earlier this year that it has purchased a 60% controlling interest in Pegatron Technology India (PTI). Less than a year ago, in March 2024, the company acquired Wistron’s India operations, which were situated in Narsapura, Karnataka.
This was interpreted as an attempt by the business to solidify its position inside the Apple global value chain (GVC). Additionally, a media outlet revealed last week that Jabil, another Apple supplier, was also considering expanding the production of its AirPods casings in India. All of this is indicative of Apple’s larger effort to diversify its Chinese supply base in the face of persistent trade tensions between the US and China and uncertainty surrounding global tariffs.
For example, Foxconn’s India division, another Apple supplier, has benefitted greatly. It is anticipated that the Tainwanese contract manufacturer will continue to increase its investments in mobile assembly in India.
The company is expanding into new production locations in India and diversifying its portfolio, as evidenced by the construction of a massive factory in Bengaluru and a brand-new facility in Hyderabad that is focused on AirPods.
According to reports, Tata Electronics is in talks to add NXP Semiconductors, a leading semiconductor design company, as a major client. Through their agreement, Tata will manufacture NXP’s products at its outsourced semiconductor assembly and test (OSAT) facility in Assam and its future semiconductor fab factory in Gujarat.
According to one of the sources, the agreement is anticipated to replicate Tata Electronics’ previous collaboration with Analogue Devices, a US-based semiconductor manufacturing company, where the company hopes to begin chip production by 2026.
In September of last year, Analogue Devices and Tata Electronics, Tata Motors, and Tejas Networks signed a memorandum of understanding (MoU) to investigate potential collaboration in semiconductor production in India.
At that time, the Tata Group-owned company committed to producing Analogue Devices’ goods at both its OSAT facility in Assam and its future semiconductor fabrication site in Gujarat.
Shifting Away from Taiwan
Even though businesses like NXP have their own factories, they frequently outsource some of their production, which is where OSAT and the Tata fab can be useful. A media article claims that businesses desire to have an alternative to depending entirely on companies like TSMC, a well-known Taiwanese semiconductor contract manufacturing and design firm.
The research went on to say that while there aren’t many options at the advanced node, businesses like NXP would profit from bringing in players like Tata Electronics in the mature nodes.
Neil Shah, vice president-research at Counterpoint Research, emphasised the Tata Group’s long-standing partnership with NXP as the primary motivation for this action. NXP is a natural fit because of their existing business, particularly in automotive chips, and it only makes sense for Tata Electronics to talk to a number of potential customers and construct an India Rolodex for their forthcoming fab.
Tata’s Fab to be Operational Later this Year
Later this year, Tata’s Dholera factory, which can produce 50,000 wafer starts each month, is anticipated to be operational.
In addition to power management chips for electric cars, telecom, defence, automotive, consumer electronics, display, and power electronics, the facility will manufacture high-performance computation chips using 28 nm technology.
Applications for power management chips involve high voltage and high current. With a daily capacity of 48 million, Tata Semiconductor Assembly and Test (TSAT) at Morigaon, Assam, is creating domestic advanced semiconductor packaging technologies, such as flip chip and integrated system in package technologies.
Mobile phones, consumer electronics, telecom, electric vehicles, and automobiles are among the markets it will serve. In September of last year, Tata Electronics and ADI inked a memorandum of understanding (MoU) to investigate contract manufacture of the latter’s products in India.
Tokyo Electron, a partner of Tata Electronics, is the most recent fab toolmaker to consider establishing a manufacturing presence in the nation. The Tokyo Electron India Project’s project director, Vaidya Bharadwaj, told reporters that although localisation is not a top priority right now, Tokyo Electron is keen to meet the demands of the Indian market. For the business, manufacturing entails putting parts together to make sophisticated devices, including test systems, wafer bonders/debonders, etchers, cleaners, and coaters/developers. The majority of this work is currently done in Japan, with a lesser amount being done in the US. According to him, Tokyo Electron’s long-term localisation initiatives include establishing a portion of the supply chain in India.
International Semiconductor Manufacturers Eyeing Big on India
Only a few weeks have passed since California-based semiconductor manufacturer Lam Research announced an INR 10,000 crore investment in Karnataka, which was followed by Tokyo Electron’s recent announcement. According to the corporation, Lam Research’s products are utilised in semiconductor device wiring and wafer processing. The country’s Lam engineers will be able to develop, test, and validate semiconductor production equipment and processes on-site thanks to the new unit. Prior to this, in 2022, Lam Research established its first engineering unit in Bengaluru. It’s interesting to note that last year there were rumours that Applied Materials, another well-known company in this field, was also considering establishing a production facility in India. At the time, it was unclear, though, whether the company would concentrate on manufacturing semiconductors or its core fab tools in India. But according to certain media accounts, it was probably going to start out as a fab tool unit. The major providers that provide services to fab units worldwide are Tokyo Electron, ASML, KLA, Lam Research, and Applied Materials.
India is an Exciting Market: Bharadwaj
India is a fascinating market with a ton of prospects, according to Tokyo Electron’s Bharadwaj, who also stated that the company was keen to collaborate with other companies. According to him, the business has already had conversations with a number of stakeholders and has gotten really encouraging feedback. The Dholera fab support operations are the brand’s top priority right now. “Rapid progress” is being made in delivering specialised equipment while building a strong support environment,” he continued, adding that the company is still dedicated to its cooperation with Tata Electronics. He added that Tokyo Electron is actively looking for sites to install support infrastructure close to Tata Electronics’ semiconductor factory in Dholera. Quick response times depend on being close to customers, and Tokyo Electron’s operations are normally located within a 20-minute radius of a fab.
The company intends to assemble a group of highly skilled engineers in order to create a robust ecosystem of semiconductor support. Although India’s semiconductor industry is still in its infancy, he claimed that the government and industry’s “pragmatic approach” of prioritising legacy nodes before moving on to high-end chips has laid what he called a “solid foundation,” positioning India to become a major investment destination in this sector over the course of the next four to five years. Both businesses inked a Memorandum of Understanding in September of last year to work together to expedite the infrastructure for semiconductor equipment for Tata Electronics’ first Fab in India, which is being constructed in Dholera, Gujarat, as well as for its assembly and testing plant in Jagiroad, Assam.
According to a media citation, Tata Electronics plans to establish a new joint venture (JV) to purchase a 60% majority stake in Taiwanese contract manufacturer Pegatron’s iPhone facility in Tamil Nadu. According to the report, the action will improve Tata’s standing as an Apple supplier in its supply chain in India.
Partnership Plan
According to the plan, Pegatron would own the remaining 40% of the joint venture and offer technical support, while Tata Electronics would own 60% and manage day-to-day operations.
The report added that the sources did not go into detail about the financial components of the arrangement, stating that details are not yet public. Internally, inside the iPhone plant, the contract was announced on November 15. Tata and Pegatron would submit a request for permission to the Competition Commission of India (CCI) “in the coming days.”
Tata Has Become Preferred Partner of iPhone
According to a media outlet in April, Pegatron is in advanced negotiations to sell the Tata Group its sole iPhone production facility in India, which is located close to Chennai.
Apple has supported the purchase, sources informed the agency at the time. About 10,000 people work at Pegatron’s India plant, which produces 5 million iPhones a year. Tata is currently establishing an iPhone assembly factory in Hosur, Tamil Nadu, where Pegatron is anticipated to become a joint venture partner. The company already runs an iPhone assembly unit in Karnataka, which it acquired from Taiwan’s Wistron last year.
In Light of the US-China Trade Tensions, Apple May Boost iPhone Manufacturing in India
According to a report by a renowned media outlet, if US President Donald Trump fulfills his warning of enacting high taxes on Chinese imports, Apple Inc. could dramatically expand its iPhone manufacturing in India, possibly reaching $30 billion yearly over the next two years.
The current estimated yearly value of Apple’s iPhone production in India is $15–16 billion. However, Apple may decide to move more manufacturing operations to India in response to Trump’s earlier warnings to put 60–100% taxes on Chinese goods, a position he reaffirmed during his campaign. According to the source, Trump imposed tariffs on Chinese goods during his first term, and analysts think he could use a similar tactic in his second term to strengthen India’s position in Apple’s global production network. A large rise in iPhone manufacturing might improve trade dynamics overall and cement Indo-US economic ties. According to the analysis, the electronics sector in India, especially the production of iPhones, stands to gain significantly, even though other industries may see difficulties.
According to an official cited in the report, a possible boost in iPhone production may greatly benefit India, particularly in the electronics sector. According to experts, Apple may decide to move a sizable amount of its iPhone manufacturing to India as a result of Trump’s tariff policies, especially those pertaining to Chinese imports. Such a move would probably result in the creation of up to 200,000 new jobs and increase India’s manufacturing share of iPhones from the current 12 to 14% to over 26% in the upcoming years.
After a significant fire occurred at one of Tata Electronics’ manufacturing facilities last month, the Tamil Nadu government served the company with a show-cause notice. According to a report by a well-known media outlet, the notification was delivered by the Directorate of Industrial Health and Safety, asking for an explanation about the occurrence.
As stated in the report, an official pointed out that the company is required to answer within a week unless they request an extension. The warning was issued to the plant manager and the “occupier,” as is common in such instances.
According to the Factories Act, the “occupier” is responsible for ensuring the health, safety, and welfare of the workers and has the final say over how a factory operates. In corporations, the occupier is usually one of the directors.
The article further stated that the show-cause notice required that Tata Electronics submit its findings and listed the malfunctioning thermostat control at the anodising factory as the likely cause of the incident. Companies may provide alternate explanations based on independent investigations, or they may accept the government’s logic in certain situations.
An Incident Involving Fire at the Tata Electronics Facility in Hosur
The fire at Tata Electronics‘ Hosur facility had a “most probable cause,” according to the state Directorate of Industrial Health and Safety. The incident, which happened in late September, entailed a fire at one of the company’s production facilities that provides Apple with accessories.
There were reportedly more than 1,500 workers inside the plant when the fire broke out. The business confirmed the fire occurrence in a statement and guaranteed that all emergency procedures were followed to protect the safety of every employee. Tata Electronics said that they were looking into what caused the incident and that they will take the necessary precautions to protect their stakeholders and staff.
Media reports state that the Uddanapalli mobile accessory painting unit is where the fire originated. After being transported to a private hospital, three workers who had respiratory problems were said to be in stable condition.
Assembly Activities for the iPhone are Disrupted
Tata Electronics was about to start production at its iPhone assembly plant in the Koothanapalli neighbourhood of Hosur when the event happened. With the acquisition of the unit of Taiwanese electronics maker Wistron, which has been in the works for the past two years, this will be the company’s second assembly plant for the iPhone.
The iPhone assembly plant is projected to cost roughly INR 6,000 crore, which is the same amount that Tata Electronics invested in the component manufacturing that supplies Apple. It is anticipated that the combined facilities will generate over 50,000 jobs, most of which will go to women. With an estimated 35,000–40,000 employees, the iPhone assembly plant alone is expected to rank second in size among Apple’s Indian manufacturing sites, after Foxconn’s Tamil Nadu plant.
A top official from Tata Consultancy Services (TCS) has stated that the conglomerate is working along with Tata Electronics Pvt Ltd to achieve its goal of introducing India’s first chips that are created domestically by the year 2026, as reported by a media outlet,
The news article cited details provided by Sreenivasa Chakravarti, VP and head of TCS’s digital engineering division worldwide. Chakravarti said that TCS, a firm that focuses on semiconductor design and engineering, is involved in the chip manufacturing process at various stages, with Tata Electronics at the forefront. Additionally, Chakravarti brought attention to several additional shared services, such as software solutions and goods based on intellectual property (IP) for semiconductors.
At present, a significant number of companies are establishing operations in India to develop technologies and services for global markets. However, there is also a market for semiconductors in India. As a result, Chakravarti believes that the issue is to construct something for India from within India.
India Semiconductor Mission
As part of efforts to improve the semiconductor industry, the India Semiconductor Mission gave its approval in February for the establishment of three manufacturing facilities for semiconductors. There are two of these projects that are being developed by Tata Electronics as the principal company. The first of these is a greenfield chip manufacturing plant in Dholera, Gujarat, that will be constructed in conjunction with Taiwan’s Powerchip Semiconductor (PSMC) and will have an initial output capacity of 50,000 wafers per month. The plant will cost $11 billion. According to the reports, the second factory is located in Assam and is valued at $3.26 billion. Its primary focus is on chip assembly and testing.
The first chips to be manufactured at the Assam facility are expected to be made accessible by Tata Electronics by the end of 2025 or the beginning of 2026. The company intends to target businesses such as the automotive, electronics, power, consumer goods, and healthcare sectors.
First Indian Technology Services Company With Expertise in Semiconductor Engineering
TCS is the first Indian technology services company to create a robust capability in semiconductor engineering and services, according to Omkar Tanksale, a senior IT research analyst at Axis Securities. Globally, TCS has a substantial presence in the fields of semiconductor design, engineering, and software development for applications involving semiconductors.
Throughout the course of the year, Tata Electronics has been establishing collaborations with a wide variety of worldwide companies and nations in order to supply semiconductor chips.
Tesla has entered into a strategic agreement with Tata Electronics in April to acquire semiconductor processors for its global operations.
Additionally, a few days ago, Tata Electronics and Tokyo Electron Limited (TEL) inked a memorandum of understanding (MoU) with the purpose of establishing a semiconductor equipment infrastructure.
A strategic relationship between Tata Electronics and Tokyo Electron (TEL) has been established to accelerate the construction of semiconductor infrastructure for two large projects in India. In addition to providing support for Tata’s plans, which include the creation of India’s first semiconductor fab in Dholera, Gujarat, and an advanced assembly and test facility in Jagiroad, Assam, the relationship was formalized by a Memorandum of Understanding.
Through the provision of semiconductor equipment, the training of Tata’s workers, and the contribution to ongoing research and development initiatives, TEL will play a significant part in the company’s operations.
According to Toshiki Kawai, President and Chief Executive Officer of Tokyo Electron, this strategic relationship encompasses both front-end fabrication and back-end packaging technologies. It exemplifies our dedication to providing Tata Electronics with great support and value.
Massive Investment for Creating Favorable Infrastructure
In India’s semiconductor industry, Tata Electronics is making significant progress thanks to a combined investment of INR 1.18 lakh crore. Both the Gujarat fab, which will be funded with INR 91,000 crore, and the Assam facility, which will be funded with INR 27,000 crore, are planned to develop semiconductor chips for major applications in the automotive, mobile device, and artificial intelligence industries to serve a global market.
The Partnership Is Aligned With Tata Electronics’ Set Goals
Many people believe that cooperation with TEL is an essential step towards attaining the execution goals that Tata Electronics has set for itself.
According to a statement from Dr. Randhir Thakur, Managing Director & CEO of Tata Electronics, TEL has a track record of strong customer relationships and its knowledge of semiconductor equipment will contribute to the development of an evolving ecosystem that will facilitate the prompt activation of our Fab and advanced packaging facilities. The customer-centric approach that TEL offers to our cooperation is something that we are very enthusiastic about.utilized
About TEL
Tokyo Electron Ltd. (TEL) is a company that manufactures and distributes equipment for the fabrication of semiconductors and flat panel displays. They are also a maker of electronics, FPD, and semiconductor equipment. A wide variety of SPE systems that cover the primary chip production processes are developed by the company, and these systems are then supplied to producers of semiconductor devices all over the world. TEL provides high-performance FPD manufacturing equipment to FPD producers all around the world.
This equipment is utilized in the creation of screens for LCD televisions, personal computers, and other electronic devices. To produce organic light-emitting diode (OLED) systems, the company’s FPD products include coater/developers, plasma etch/ash systems, and inkjet printing systems. Asia, North America, and Europe are the three regions in which the company’s operations are dispersed. Located in Minato-Ku, Tokyo, Japan, TEL’s headquarters are located.
Tata technologies were founded in the year 1989, situated in Pune, India. It is one of the largest firms in India. Tata Technologies provides services in product lifecycle management, engineering and design, product development, manufacturing, and IT service management to automotive and aerospace original equipment manufacturers and their suppliers.
The company has branches in North America, Middle eastern countries, the Asia-specific region, and Europe. They have their regional headquarters in the United States. The company has around 8,000 employees which is their global workforce since they operate in more than 25 countries.
There was a recent controversy against Tata technologies which said that they had illegally terminated around 800 – 1000 employees.
In June 2020 Tata Technologies has put around 400 employees on Furlough. In simple terms, furlough is a temporary leave that is given to employees due to certain needs of the company or employer. It can be because of special needs like economic conditions.
June 2020, when the lockdown was imposed in India and the company saw its business slowing down during the pandemic. This was the reason for putting the employees on Furlough.
According to the company, the employees on furlough would be part of the company and would have access to their corporate insurance. But the employees wouldn’t receive their monthly salary until their furlough is removed. These 400 employees were asked to continue their leave until 31 December 2020.
On 1 March 2021, around 800 – 1000 employees received an email of termination from the company. The email had the content which said that the employees would receive a month’s salary and 31 March 2021 would be their last working day. The employees will be terminated without providing them their compensations, when they were on furlough.
The email received by the employees said that they were being asked to leave since the company was not able to find any billable assignments for its employees. The company has also stated that during the employee’s paid and unpaid leaves.
The company stated that, they tried to find billable assignments for employees. But unfortunately, they couldn’t find billable assignments according to the employees proportionate job expertise, work experience, and qualification.
NITES is an employee union that is a non-profit organization. It is based in Pune, Maharashtra. NITES (Nascent Information Technology Employees Senate). NITES has received several complaints from the employees of Tata regarding the termination.
Harpreet Saluja, the president of NITES has filed a complaint with the Labor Commissioner’s office in Pune. NITES has filed a complaint to take legal actions against Tata technologies, Hinjewadi, Pune. NITES filed a complaint stating that the employees were illegally terminated for maintaining the profitability of the business, during the pandemic.
According to the purview of the Industrial Disputes Act and the Shops and Establishment Act, IT firms like Tata technologies can’t implement Furlough. The concept of Furlough is considered illegal for IT firms.
In the complaint which was filed to the Labor Commissioner Pune, NITES wrote that the company has violated the Statutory Labor Laws and other rules and regulations issued on 31 March 2020 by the Government of Maharashtra.
NITES has stated that they are expecting the authorities of the state/central government to take necessary actions towards the company. They would want the authorities to provide them with a basic structure to handle such situations.
They would want the authorities to take strict actions so that this can be an example to other companies, also the rights of the employees would be protected. This incidence should avoid such insensitive behavior towards employees in the future. This was stated in the complaint letter provided by NITES.
Tata Technologies have refused such claims. It stated that they haven’t terminated 800 employees. They had a discussion with a selected set of employees and according to the discussion they had opted for paid leave and later on followed by unpaid leave. This was for a specific period of time.
The company also stated that these employees were still part of the company and received health and medical insurance from the company. Tata has claimed that even their immediate family members were covered under their corporate insurance policy.
The company said, due to the arising business challenges during July 2020 because of the lockdown in India. They had taken measures to make Tata technologies an agile, flexible, and responsive organization. They have said that the statement by NITES is not true.
FAQ
Do employers have to pay for layoffs?
Generally employees who lose their jobs in a layoff have no automatic right to severance pay but there are few exceptions-Mass layoff severance. The company has to provide a small amount of severance.
Can you be rehired after being laid off?
Yes, There are are no laws prohibiting employers from rehiring laid-off employees.
Who qualifies for furlough?
You can be furloughed whether you are on a full-time, part-time, agency, flexible or zero-hour contract, but you must have been on your employer’s payroll before the extension was announced.
Conclusion
The spokesperson of the company has stated that they were successful in assigning 18% of their employees with new tasks and projects. Meanwhile, the company has been trying to communicate and maintain the relationship with the remaining set of employees sticking to their statutory norms.
