The Tata Group of India will begin producing semiconductors in the country over the next several years, according to the chairman of the group’s main company, a move that will position the South Asian country as a significant component of global chip supply chains.

Tata Sons Chairman Natarajan Chandrasekaran revealed that the company wants to create new operations in developing industries. Potential collaborators include semiconductor companies and foundries in the United States, Japan, Taiwan, and South Korea. Tata established a partnership with Renesas Electronics in semiconductor design and development in June.


Tata would also look into the prospect of launching an upstream chip fabrication platform, according to Chandrasekaran. Wafer fabrication is a more difficult technological and economical procedure than assembly and testing. Tata’s foray into chipmaking will pave the way for India’s semiconductor sector.

It is expected to more than double to $64 billion between 2021 and 2026. Except for software-based design, the country presently has essentially no semiconductor sector, despite rising demand for semiconductor-intensive products such as smartphones and electric vehicles.

US-China tensions

Following the global chip scarcity and US-China tensions, momentum is growing to diversify chip supply chains. It is currently centered in East and Southeast Asia. The continuous “decoupling” of chip-related technology between the United States and China is driving major chipmakers to seek more diverse supply-chain locations. Tata and the Indian government are both looking to capitalize on this transition in order to establish India as a new semiconductor center.

Chandrasekaran noted that his company has been promoting its “future-ready” strategy. In this current group companies ranging from steel to weaponry adapt to new problems. These include digitization and climate change while simultaneously establishing new ventures.

As part of that effort, the chairman announced intentions to invest $90 billion over the next five years. Aside from semiconductors, the chairman stated that the company is in the process of establishing new businesses such as the production of electric vehicles and EV batteries, the production of renewable energy, and the development of “super apps”. These apps allow users to purchase goods and services ranging from groceries to financial products.

Tata’s main IT and auto companies, which rely largely on imported semiconductors, may gain from entering the chipmaking market. Securing a consistent supply has been especially difficult for the latter. Due to the global semiconductor shortage, both production and sales in India’s auto sector fell last year.

This will further worsen for Tata as it transitions to electric vehicles, which require more semiconductors than internal combustion engines. Despite having a less than 20% share of India’s entire passenger-vehicle market last fiscal year, Tata Motors accounts for roughly 90% of EV sales in that segment.

AGM statements

Earlier this year, at the AGM of the IMC Chamber of Commerce and Industry, Chandrasekaran explained that changes to global supply chains, which are heavily reliant on China, in the aftermath of the pandemic and geopolitical changes would cause businesses to shift their reliance to other countries, describing this as a huge opportunity for India.

According to sources, Tata Sons has shifted its focus to new-age firms that offer promise in the post-Covid future. As the industry prepares for 5G, it purchased Tejas Networks for a larger portion of telecom equipment production. Tata Digital, which aspires to create a super app, has also bought e-commerce companies. It includes BigBasket and 1mg, as well as investing in Curefit.

The remarks come at a time when the Indian government is looking to increase investment in the entire electronics industry. Rajeev Chandrasekhar, Union Minister of State for Entrepreneurship, Skill Development, Electronics, and Technology, stated last month that the Prime Minister has set an objective of increasing electronics production to $300 billion by 2025-26.

Also Read : TSMC announces $40 billion investment for production of chips in Arizona

 154 total views,  1 views today