Asml and Tata Electronics have signed an agreement for the construction of the first 300-millimeter semiconductor factory – the most advanced industrial standard – in India, in the state of Gujarat.
WHAT ASML DOES, WHAT TATA ELECTRONICS DOES
Asml is headquartered in the Netherlands, it is the most valuable European company and the most important machinery company for microchips in the world: it actually holds a global monopoly in extreme ultraviolet (EUV) lithography equipment, an extremely sophisticated process that, using very short wavelength light, allows “printing” tiny circuits on microchips.
Tata Electronics, on the other hand, is an Indian electronic components company controlled by the Tata group. The automotive division of the conglomerate, Tata Motors, will acquire the commercial vehicle manufacturer Iveco: the operation should conclude in the third quarter of 2026.
THE FACTORY IN GUJARAT
Tata Electronics is building a 300-millimeter semiconductor factory in Dholera, in western India. The devices produced at the plant – which required an investment of 11 billion dollars – will be destined for the automotive industry, consumer electronics, and infrastructure for artificial intelligence.
Asml will supply the factory with its “full range of advanced lithography tools and solutions,” according to the press release.
ASML’S INTERESTS IN INDIA
Asml’s CEO, Christophe Fouquet, stated that the “rapid expansion” of the semiconductor sector in India “offers numerous exciting opportunities and we are determined to establish long-term partnerships in the region.” The Indian government has allocated multibillion-dollar subsidies to stimulate the opening of microchip factories and attract foreign capital: not by chance, at the signing of the agreement between Asml and Tata Electronics, Indian Prime Minister Narendra Modi was present, along with his Dutch counterpart Rob Jetten.
For Tata Electronics, the partnership is advantageous because it allows access to high-end machinery; for Asml, the agreement is useful because it opens a new, vast market: India is becoming Apple’s new manufacturing base (already today almost one in five iPhones is assembled here) and Google wants to make it a computing center for artificial intelligence (in October it announced a 15 billion investment for a data center in Andhra Pradesh). Being the most populous nation in the world, India offers a vast market for the so-called digital economy, with nearly a billion Internet users: Amazon and Microsoft have also invested billions to build data centers there.
Politically, despite some trade tensions, India is a very important country for the United States: although not a formal ally, it is considered useful for containing China in Asia. The European Union also considers it a possible commercial substitute for China.
COMMERCIAL DIVERSIFICATION
India could allow Asml to gradually reduce its exposure to China, which last year was its largest single market, representing over 30 percent of total sales.
The company urgently needs to “replace” China also because the trade restrictions imposed by the United States could tighten: a new law, the Match Act, indeed provides further limitations on exports of chipmaking machinery, aiming to hinder the technological advancement of the Chinese semiconductor industry.
Although they have previously aligned with American restrictions on the sale of Asml’s advanced machinery, the Netherlands have recently opposed the Match Act: they fear the extraterritorial nature of the law (it applies also to companies based in countries other than the United States) and its scope.
