Shadow of rare earths over Tata's chip plans

Tata Electronics plans to roll out its first semiconductor chip from its Gujarat plant by mid-2027, but the company faces potential delays if India is unable to secure ample supplies of rare earth and critical elements early enough, said two executives privy to the development.

- Shouvik Das

Rare earths and critical elements are widely used in the purification and fabrication of semiconductor wafers and supply disruptions could slow development.

"There is considerable use of rare earth metals and minerals in the chip fabrication process. Associated elements such as molybdenum, hafnium and others are also used. If the current China-linked disruption continues by the time our clean room is ready, we may face delays in making wafers from India," an executive aware of the matter said.

A clean room is a highly controlled environment free of dust, microbes and other particles to prevent contamination of sensitive electronic components during manufacturing.

Tata Electronics declined to comment.