The Tata Group, one of the country’s most important business groups, will start producing chips. According to a report published in Nikkei Asia, the Tata will soon start manufacturing semiconductors locally and create a range of applications that cannot be replicated outside India.. The president of Tata Sons, Natarajan Chandrasekaran, confirmed the same in an interview with this publication.
The company will likely have semiconductor manufacturers and foundries in the US, Japan, Taiwan, and South Korea as potential partners for the project. The confirmation comes just days after reports that Apple would get into iPhone assembly in India. The group is reportedly talking about buying Wistron Crop’s sole factory in India for 50 billion rupees ($612.6 million).
The company revealed that the Tata Group would look to manufacture its product cheaper in India in the coming years. According to a new report from Nikkei Asia, Tata Sons chairman Natarajan Chandrasekaran said the company is in talks with “various players” about partnerships with existing chip makers.
In the interview, Chandrasekaran mentioned that he had founded Tata Electronics, “based on which we are going to start a semiconductor assembly test business.” In this report, based on semiconductor design and development, Tata already announced a collaboration with Tokyo-based Renesas Electronics in June this year. He added that the company is working on launching new businesses in emerging areas, including electric vehicles (EVs).
“We will be talking to several players,” added the chief, raising the possibility of partnerships with existing chip makers. Starting a chip manufacturing business alone is a challenge for an inexperienced company. Semiconductor manufacturers and foundries in the United States, Japan, Taiwan, and South Korea are considered potential partners. Tata had previously announced in June that it had a semiconductor design and development partnership with Renesas Electronics.
Chandrasekaran said that Tata “will explore the possibility of launching an upstream chip manufacturing platform.” The upstream wafer manufacturing process is technically and financially more challenging than the downstream assembly and test stages.
According to the Electronics and Semiconductor Association of India, Tata’s move into chipmaking will break new ground for India, where the semiconductor market will double to $64 billion between 2021 and 2026. Currently, the country has virtually no semiconductor industry other than software-based design, although demand for compact semiconductor products such as smartphones and electric vehicles is increasing.
Momentum is diversifying its chip supply chains, which are currently concentrated in East and Southeast Asia, following global chip shortages and US-China tensions. The continued US-China “decoupling” in chip-related technology is driving major chip makers to seek more diversified supply chain locations. Tata and the Indian government sought to capitalize on this shift to position the country as a new semiconductor hub.
Chandrasekaran explained that his group is promoting its “future-ready” strategy, in which the group’s existing companies, from steel to weapons, adapt to new challenges, such as digitalization and climate change, while also starting new businesses.
“If you look at the group, there are three major initiatives. The first is to strengthen the core companies, the second is to move the core into the future, and the third is to invest in future businesses.
In explaining the second point, he said: The transfer includes the following:
We are preparing them for number one, the digital world. The second is a transition to future energy and sustainability. The third step is the transition to flexibility in the supply chain.
As part of this effort, the president revealed that the group plans to invest US$ 90 billion over the next five years. In addition to semiconductors, the president said that the company is launching new businesses, such as the production of electric vehicles and electric batteries, the production of renewable energy, and the development of “utility tools” that allow users to buy goods and services. Services from groceries to financial products
Investing in chip manufacturing could benefit Tata’s core automotive and IT businesses, which rely heavily on imported semiconductors. Ensuring sustainable supply has been a particular challenge for the latter. Production and sales in the Indian car industry fell last year amid global chip shortages.
This will only become a bigger problem for Tata as it moves into electric vehicles that require more energy. in the future.In a recent interview, Tata Group Chairman Natarajan Chandrasekaran said that their company will be exploring the Indian market for electric cars in order to improve sustainability.Bringing this technology north from China could create a lack of accountability in the future and increase emissions.China has surpassed the U.S., becoming the world’s biggest CO2 emitter, according to The New York Times in 2016.