Tata Electronics has secured Intel as a prospective customer for its upcoming chip facilities, potentially signalling the US chipmaker’s confidence in India’s manufacturing ambitions.

The electronics-manufacturing arm of the 156-year-old salt-to-software Tata group is investing about $14 billion to build India’s first semiconductor fabrication facility in Gujarat and a chip assembly and testing facility in of Assam.

The Modi government has been pushing for India to rival global semiconductor powerhouses such as Taiwan, aiming to make the country a chipmaker for the world despite initial setbacks. Both Tata projects are beneficiaries of substantial amounts of government subsidies.

As part of the memorandum of understanding, Intel and Tata intend to explore manufacturing and packaging of Intel products for local markets at Tata Electronics’ upcoming Fab and OSAT (Outsourced Semiconductor Assembly and Test) facilities, as well as a collaboration for advanced packaging in India.

Moreover, the duo will also explore the opportunity to rapidly scale AI PC solutions for consumer and enterprise markets in India, which they say is projected to be a global top-five market by 2030.

“We see this as a tremendous opportunity to collaborate with Tata to rapidly scale in one of the world’s fastest-growing compute markets, fuelled by rising PC demand and rapid AI adoption across India,” Intel Corporation CEO Lip-Bu Tan said in a statement.

This collaboration would leverage Intel’s AI compute reference designs, Tata Electronics’ electronics manufacturing services (EMS) capabilities, and broad access to the Indian market through Tata Group companies, Tata Electronics said in a statement.

Tata Sons chairman N. Chandrasekaran added, “We are excited to collaborate with Intel, and this strategic alliance would accelerate our efforts.

“Together, we will drive an expanded technology ecosystem and deliver leading semiconductors and systems solutions, positioning us well to capture the large and growing AI opportunity.”