Tata Electronics is looking to acquire a fabrication or outsourced semiconductor assembly and test (OSAT) facility in Malaysia.

According to a research report from PublicInvest Research, India-based Tata is currently engaged in ongoing discussions with specialty foundry X-Fab, semiconductor manufacturer SilTerra Malaysia, OSAT, and sensor company Globetronics Technology.

The research report said the acquisition initiative is being led by KC Ang, who previously held the role of VP of operations at SilTerra Malaysia before being appointed president of Tata Semiconductor Manufacturing in April 2025.

It further noted that should any such acquisition go ahead, it would provide Tata with access to Malaysia's “mature ecosystem and deep expertise” in assembly, testing, and advanced packaging, in addition to helping the company “mitigate risks associated with current semiconductor tariffs and provide a diversified platform to serve a broader global customer base.”

PublicInvest Research said it believed SilTerra and Globetronics Technology presented the most “attractive acquisition targets” due to their relatively low entry costs.

In September 2024, Tata Electronics partnered with Taiwan’s Powerchip Semiconductor Manufacturing Corporation to build India’s first semiconductor manufacturing plant in Dholera, Gujarat.

Currently, around 13 percent of global chip testing and packaging takes place in Malaysia but the government reportedly wants to further establish the country as a leader in semiconductor front-end design.

In 2024, the government of Malaysia unveiled its National Semiconductor Strategy (NSS), a three-phase $5.3 billion plan designed to boost the country’s semiconductor industry. The three phases of the NSS involve leveraging existing capacity, pursuing cutting-edge technology, and developing local chip design and advanced packaging capabilities.

In April of that same year, the Malaysian government announced plans to build the largest integrated circuit design park in Southeast Asia to promote domestic semiconductor design, prototyping, and manufacturing.

Chip design company Arm is set to establish a base in Malaysia, having reached an agreement with the government in March 2025.