Tata Electronics Eyes Malaysian OSAT Acquisition to Bolster Global Chip Strategy

Tata Electronics Eyes Malaysia’s Semiconductor Players in Strategic Expansion Move

India’s Tata Electronics Ltd is reportedly in advanced talks to acquire a semiconductor fabrication or outsourced semiconductor assembly and test (OSAT) facility in Malaysia — a move that could significantly boost Malaysia’s role in the global chip supply chain, while helping Tata deepen its semiconductor capabilities.

According to PublicInvest Research, the potential acquisition is expected to enhance Malaysia’s standing in chip packaging, testing, and assembly services, and deepen bilateral industrial ties between Malaysia and India at a time when global supply chains are being restructured.

🏭 Targeted Players: X-Fab, DNEX’s SilTerra, and Globetronics

Citing a report by The Economic Times, Tata Electronics is said to be evaluating several Malaysian players including:

• X-Fab (German-headquartered foundry with operations in Sarawak)

• Dagang Nexchange Bhd (KL:DNEX) and its 60%-owned SilTerra Malaysia Sdn Bhd, a key local CMOS foundry

• Globetronics Technology Bhd (KL:GRONIC), a Penang-based OSAT player with global clientele

Tata’s entry strategy appears to focus on acquiring existing capabilities in backend chip assembly and packaging — an area where Malaysia has strong regional leadership, particularly in Penang, Kulim, and Melaka.

🌏 Why Malaysia? A Mature, Globally Connected Semiconductor Hub

Malaysia is an integral part of the global semiconductor supply chain, especially in OSAT services, which make up around 13% of global market share. With more than 50 years of industry experience, Malaysia has:

• A skilled talent pool

• A proven electronics ecosystem

• Established trade connectivity with both the US and China

PublicInvest noted that Tata’s move aligns with the “China-plus-one” strategy adopted by global tech giants like Apple, who are rapidly diversifying their production bases away from China due to escalating US-China tensions and supply chain vulnerabilities.

📦 Tata’s Apple Link: A Growing Role in the iPhone Supply Chain

Tata Electronics has deepened its partnership with Apple in recent years, expanding from component manufacturing to iPhone assembly, making it a direct competitor to Taiwan’s Foxconn.

Apple is aggressively shifting part of its production ecosystem to India, where Tata’s facilities now contribute to roughly 18% of global iPhone production.

By acquiring backend semiconductor capabilities in Malaysia, Tata can:

• Improve its competence in advanced packaging and testing

• Bolster its own chip design and integration capabilities

• Support Apple’s ambitions for a vertically integrated, resilient supply chain

🧠 Led by KC Ang: Malaysian Talent at the Helm

The initiative is reportedly led by KC Ang, President of Tata Semiconductor Manufacturing, who brings deep local knowledge from his prior role as Vice-President of Operations at SilTerra Malaysia.

This local expertise enhances Tata’s position in negotiating and integrating operations with Malaysian players.

“The potential acquisitions would allow Tata to tap into Malaysia’s mature ecosystem and deep expertise in assembly, testing, and advanced packaging,” said PublicInvest.

💡 Strategic Rationale Behind the Acquisition

✅ 1. Rapid Capability Building

Malaysia offers an immediate pathway for Tata to enter the backend semiconductor market, leveraging existing facilities and talent.

✅ 2. Tariff Risk Mitigation

Amid tightening global trade rules and semiconductor export controls, a presence in Malaysia gives Tata access to a non-aligned, trade-friendly manufacturing base.

✅ 3. Apple Supply Chain Integration

Proximity to Malaysia’s supply chain allows Tata to better integrate its chip packaging efforts into Apple’s production ecosystem in Asia.

✅ 4. Low Entry Costs

Players like Globetronics and SilTerra are attractive due to their relatively low valuations compared to Western or Taiwanese firms, offering strong ROI potential.

📊 Company Snapshot: Potential Acquisition Targets

🔮 What’s Next for Malaysia’s Tech Sector?

If the deal materializes, it will:

• Solidify Malaysia’s role as a strategic semiconductor hub for Asia

• Attract greater FDI from Indian conglomerates

• Create new employment opportunities in advanced packaging and AI-chip design

• Encourage more India-Malaysia industrial collaboration

Such a move would also align with Malaysia’s National Semiconductor Strategy, which aims to position the country as a “global fabless powerhouse” and design-test-assembly centre in Southeast Asia by 2030.

✅ Conclusion: A Win-Win for Malaysia and Tata

Tata Electronics’ potential acquisition of a Malaysian semiconductor asset would mark a pivotal milestone — not just for the Indian tech giant, but also for Malaysia’s semiconductor ambitions. By plugging into Malaysia’s established backend ecosystem, Tata can accelerate its global semiconductor roadmap, while Malaysia continues to attract value-added, strategic FDI that creates jobs and deepens local capabilities.

As global supply chains rewire for resilience and diversification, Malaysia stands out as a natural partner for India’s semiconductor ascent — and Tata’s next bold move may well begin here.