Tata Group will begin producing semiconductors in India within a few years, Tata Sons chairman Natarajan Chandrasekaran told Nikkei Asia in an interview on December 8.
The move by the auto-to-steel conglomerate can make India a key part of global chip supply chains, which are yet to fully recover from COVID-induced disruptions.
In an interview with the Tokyo publication, Chandrasekaran said that the company plans to launch new businesses in emerging fields such as electric vehicles.
"We have created Tata Electronics, under which we are going to set up semiconductor assembly testing business," Chandrasekaran told Nikkei Asia, referring to an electronic components manufacturer that the group founded in 2020. "We will have discussions with multiple players," he added, raising the possibility of partnerships with existing chip manufacturers.
Chandrasekharan has in the past, too, expressed the group's willingness to foray into semiconductor manufacturing.
Pegging the market opportunity of high-tech manufacturing of electronics at $1 trillion, Chandrasekaran had said Tata Group had already set up a business to seize the opportunity.
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Speaking with Nikkei Asia today, the industrialist also highlighted that Tata will "look into the possibility of eventually launching an upstream chip fabrication platform."
Semiconductor manufacturing, which involves building chipsets among other things, requires huge investments.
The upstream semiconductor manufacturing process plant called wafer fabrication plant, or fab, is more challenging both technologically and financially compared with the downstream process of assembly and testing.
Tata Sons chairman also told Nikkei Asia that the group planned to invest $90 billion over the next five years.
In addition to semiconductors, the chairman said the company was in the process of starting up new businesses such as the manufacture of EVs and EV batteries, production of renewable energy and development of "super apps" that allow users to buy goods and services from groceries to financial products", the Nikkei report said.
While speaking at IMC Chamber of Commerce and Industry's AGM earlier this year, Chandrasekaran explained that alterations to the global supply chains, which are heavily dependent on China, in the aftermath of the pandemic and geopolitical changes, would make businesses shift their reliance on other countries and called this a huge opportunity for India.
Tata's new businesses
Moneycontrol has reported that Tata Sons has been quick to pivot to new-age businesses that hold promise in the post-Covid era. It acquired Tejas Networks for a larger share of telecom equipment manufacturing as the sector prepares for 5G.
Tata Digital, with ambitions of building a super app, has also acquired e-commerce businesses including BigBasket and 1mg, and invested in Curefit.
While unveiling the group’s plan to enter the semiconductor business in August, Chandrasekaran said, “The Tata group has already set up a business to seize the promise of high-tech manufacturing for electronics. A domestic electronics industry could unlock $1 trillion in GDP and create millions of jobs.”