Tata Group Considers Manufacturing Semiconductors: Report

Tata Group, the parent company of home-grown automaker, Tata Motors, is reportedly looking at foraying into semiconductor manufacturing. The company's Chairman, N Chandrasekaran has said that Tata Group has already set up a business to seize the opportunity of high-tech manufacturing of electronics, which he pegs to be a $1 trillion market. The company has already announced its plan to manufacture 5G equipment and is working on a string of acquisitions to create the Tata Digital business. The company will be required to make huge investments for large-scale production of semiconductors in India, which involves building chipsets among other things.

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Speaking at IMC Chamber of Commerce and Industry's AGM, he said, "At the Tata Group, we have already pivoted into a number of new businesses like electronics manufacturing, 5G network equipment as well as semiconductors, in all probability." He also added, "On rebalancing supply chains, India can significantly benefit from the geopolitical shifts that we are seeing. At the group, we have already set up a business to seize the promise of high-tech manufacturing of electronics, precision manufacturing, assembly and testing and semiconductors in the medium term."

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The company will be required to make huge investments for large-scale production of semiconductors in India

There is a major shortage of semiconductors across the globe which has heavily affected vehicle production both in India and other global markets. And a company like Tata entering into this business could help to lower the dependency on global brands. In fact, Chandrasekaran also explained that alterations to the global supply chains, which are heavily dependent on China, in the aftermath of the pandemic and geopolitical changes, will make businesses shift their reliance on other countries and called this a huge opportunity for India, which becomes the second base.

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A company like Tata entering into this business could help to lower the dependency on global brands

The head of the Indian conglomerate further said that he sees four trends emerging in the post-pandemic world - Rapid digital acceleration, a new approach to supply chains, a re-imagination of growth with environmental sustainability at the core and inclusion of health and wellness concerns by every business. The company believes that these four themes will play into each of Tata Group's existing businesses, and they'll also lead to new initiatives for the brand. Right now, Tata Digital is building multiple platforms including a consumer offering covering retail, travel, financial services, health and education, which will target both high-frequency buys and discretionary spends.