Tata Group to Enter Semiconductor Manufacturing, can India Become the Next Chip Manufacturing Hub?

[safari2021]

Mumbai-based conglomerate Tata Group, which has already forayed into manufacturing of hi-tech electronics, is now planning to get into semiconductor manufacturing. The move comes at a time when the Covid-19 pandemic caused and later exacerbated a global shortage of chips and semiconductors.

Why is Tata Group foraying into semiconductor manufacturing?
Tata Sons Chairman N Chandrasekaran said recently: “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.”
The conglomerate has also recently acquired a stake in Tejas Networks, which is involved with manufacturing of telecom equipment. In addition to these, the Tata Group has already laid down its plans for a digital foray through a super-app and has acquired stakes in consumer internet firms like BigBasket, 1mg.com and CureFit.
Why is the timing significant?
Currently, the world is experiencing a shortage of chips and semiconductors that have become essential not only for new-age technological products like smartphones and computers, but also for traditional sectors like automobiles.
Several carmakers in the world have delayed deliveries of their vehicles and even pushed the launch of new vehicles because of the chip shortage. Tata Motors’ UK-based unit Jaguar-Land Rover has also done so.
For the Tata Group, while a foray into chip making would mean entering a lucrative business that can find customers not only in India but across the world, it would also be significant for captive use with Tata Motors, Tata Power, etc.
What is behind the global chip shortage?
The chips, or semiconductors, which are the brain-centre of any electronic technology has found itself to become a rare commodity in the post-Covid era, with several large factories in places like South Korea and Taiwan being shut down. This has created pent-up demand that these foundries were unable to satisfy after opening up.
On the one hand, the pandemic caused a surge in demand for electronic devices such as smartphones, laptop and computers, etc.

The manufacturing and logistical bottlenecks meant that the situation was only exacerbated. This shortage that began last year, is expected to go on till 2022, and to prevent a future situation like this, a number of companies are planning to reduce their dependance on the only few large factories that supply to the whole world.

Explained: Why is Tata Group getting into semiconductor manufacturing?

For the Tata Group, while a foray into chip making would mean entering a lucrative business that can find customers not only in India but across the world, it would also be significant for captive use with Tata Motors, Tata Power, etc.

indianexpress.com

 

[Black Tornado]

View attachment 769493

Mumbai-based conglomerate Tata Group, which has already forayed into manufacturing of hi-tech electronics, is now planning to get into semiconductor manufacturing. The move comes at a time when the Covid-19 pandemic caused and later exacerbated a global shortage of chips and semiconductors.

Why is Tata Group foraying into semiconductor manufacturing?
Tata Sons Chairman N Chandrasekaran said recently: “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.”
The conglomerate has also recently acquired a stake in Tejas Networks, which is involved with manufacturing of telecom equipment. In addition to these, the Tata Group has already laid down its plans for a digital foray through a super-app and has acquired stakes in consumer internet firms like BigBasket, 1mg.com and CureFit.
Why is the timing significant?
Currently, the world is experiencing a shortage of chips and semiconductors that have become essential not only for new-age technological products like smartphones and computers, but also for traditional sectors like automobiles.
Several carmakers in the world have delayed deliveries of their vehicles and even pushed the launch of new vehicles because of the chip shortage. Tata Motors’ UK-based unit Jaguar-Land Rover has also done so.
For the Tata Group, while a foray into chip making would mean entering a lucrative business that can find customers not only in India but across the world, it would also be significant for captive use with Tata Motors, Tata Power, etc.
What is behind the global chip shortage?
The chips, or semiconductors, which are the brain-centre of any electronic technology has found itself to become a rare commodity in the post-Covid era, with several large factories in places like South Korea and Taiwan being shut down. This has created pent-up demand that these foundries were unable to satisfy after opening up.
On the one hand, the pandemic caused a surge in demand for electronic devices such as smartphones, laptop and computers, etc.

The manufacturing and logistical bottlenecks meant that the situation was only exacerbated. This shortage that began last year, is expected to go on till 2022, and to prevent a future situation like this, a number of companies are planning to reduce their dependance on the only few large factories that supply to the whole world.

Explained: Why is Tata Group getting into semiconductor manufacturing?

For the Tata Group, while a foray into chip making would mean entering a lucrative business that can find customers not only in India but across the world, it would also be significant for captive use with Tata Motors, Tata Power, etc.

indianexpress.com

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https://twitter.com/x/status/1426020435439747076

 

[Splurgenxs]

I think Tata is well poised to receive govt incentives as well.
A high trust candidate, as failure is part and parcel of what they are getting into, a name like Tata is necessary.

Learn from china, and brace for a long bumpy ride.

 

[Paul2]

It will be good if they can pull anything more than discrete transistors.

Even China had to have foreign companies build our fabs. Building on your own is throwing out the previous 40 years of international expertise one way or another.

 

[INS_Vikrant]

Tata Group has an already working relationship with ASML and would easier to procure lithography machine and othe chip making equipment from them

TCS to implement unified global process blueprint for ASML

"As computer chips get smaller and smaller, our lithography machines grow increasingly more complex and customised."

www.google.com

 

[Chakar The Great]

India starts everything with good intention but extra ordinary publicity and chest thumping shows sense of insecurity. They are unsure of them.


Its a good idea to enter semi conductor markets, but becoming global hub for same is far fetch idea. Any ways we ll wait and watch.

 

[Paul2]

Tata Group has an already working relationship with ASML and would easier to procure lithography machine and othe chip making equipment from them

TCS to implement unified global process blueprint for ASML

"As computer chips get smaller and smaller, our lithography machines grow increasingly more complex and customised."

www.google.com

They are going for ASML machines. That means very recent nodes. For everything else, Japanese steppers are the king.

Bad move. It will take tons of time to setup any much recent node fab, and this is what they don't have. Once the capacity crunch is over, they window of opportunity will evaporate.

Highly automated recent node 300mm fabs can be capacity scaled much faster than 200mm.

I think they only can launch a 200mm fab in the realistic timeframe to capture any market.

 

[safari2021]

India starts everything with good intention but extra ordinary publicity and chest thumping shows sense of insecurity. They are unsure of them.


Its a good idea to enter semi conductor markets, but becoming global hub for same is far fetch idea. Any ways we ll wait and watch.

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[touela]

The recent shortage showed one thing- don’t put your eggs in one basket. USA and EU are investing heavily to fulfill their own demands. I think in the future the semiconductor industry will only saturate local demands.
that said some leading semiconductor manufacturers will still supply

 

[hualushui]

This is a correct decision, and every major multinational company will invest in a semiconductor plan.
However, I am not sure whether Tata has enough capital to enter this industry.
The annual capital support of Samsung and TSMC is as high as 10-15 billion dollars every year. China has invested 150 billion dollars in five years, but it has not yet achieved great results. China will continue to invest more than 200 billion dollars in capital in the next five years.
This is an industry with very high capital expenditures and very high technology barriers. Is India ready?