Tata Group all set for Semiconductors Foray

Tata

Indian Market
Last Updated: 2022-08-08T18:44:57+05:30

If there is one area where the small country of Taiwan has made a mark in the global business landscape, it is in the manufacture of high-quality of semiconductor chips. Today, semiconductor chips are the brain behind most electrical and electronic equipment that require some form of computing intelligence. Apart from computers and mobile phones, even washing machines, televisions, refrigerators and cars require chips. As manufacturing becomes more complex, dynamic and connected, semiconductors or microchips play a bigger role.

In the last few quarters, the biggest challenge to the global business community has been the shortage of semiconductors. The demand for semiconductors got a geometric boost but the supply has not been able to keep pace. Manufacturing semiconductors is complex, intricate and capital intensive and supply takes time. It is here that the Tatas are sensing a trillion-dollar opportunity to tap globally.

In a speech at the IMC, N Chandrasekharan of Tata Sons announced that the Tatas were looking to leverage on this semiconductor opportunity in a big way. Chandrasekharan added that the Tatas had pivoted high-tech projects in electronics, defence, 5G network equipment etc and was perfectly positioned to ride the semiconductor opportunity. He also added that China disrupting global supply chains opens up a huge opportunity for India to get into semiconductor manufacturing in a big way.

While Chandrasekharan did not elaborate on details, this is obviously part of restructuring of the business lines that Tatas are undertaking. In the last few quarters, Tatas have tried to integrate their defence initiatives, technology initiatives and IT initiatives under clustered baskets. Manufacturing semiconductors requires scale, technology and a powerful balance sheet and the Tatas are certainly positioned to bring in all three. We need to await details of their chip plans.

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