Analog Devices (ADI.US) in talks with Tata Group to produce semiconductors in India

U.S. chipmaker Analog Devices (ADI.US) said on Wednesday it has signed an agreement with India's Tata Group to explore the production of semiconductor products in India.

Tata Electronics, the electronics manufacturing subsidiary of the Tata Group, will invest $14bn to build India's first semiconductor wafer plant in Gujarat and a chip assembly and testing factory in Assam.

The Indian government earlier this year approved the construction of Tata's semiconductor plant.

Analog Devices said in a statement that Tata Electronics and Analog Devices plan to explore opportunities to produce Analog Devices products at Tata Electronics' plants in Gujarat and Assam.

Under the agreement, Tata will also use Analog Devices products in Tata Motors' electric vehicles and Tejas Networks' telecom infrastructure.

The companies did not specify which products would be manufactured in India and which would be used by Tata.

Prime Minister Narendra Modi has been pushing India to compete with global semiconductor giants, aiming to make India a global chip manufacturing hub, despite initial setbacks.

Earlier this month, the western state of Maharashtra said Adani Group and Israel's Tower Semiconductor (TSEM.US) planned to build a semiconductor manufacturing plant for $10bn. India's infrastructure giant Larsen & Toubro also plans to build a factory for its automotive chip unit.

International companies such as NXP Semiconductors (NXPI.US) and Micron Technology (MU.US) have also announced plans to invest in and build facilities in India.