Boost for Auto Sector Likely as Tata Sets Up Business for Semiconductor Industry

Tata Group, the industrial backbone of the country, is all set to expand its footprint in another new manufacturing sector. The Mumbai-based conglomerate is gearing up to foray into semiconductor manufacturing. The decision has come in the wake of a global shortage of chips and semiconductors in the pandemic-wounded world.

According to a Business Standard report, N Chandrasekaran, at the IMC Chamber of Commerce and Industry, said, “Tata Group has already shifted its focus into multiple new businesses like 5G Network equipment, high-tech manufacturing of electronics, and semiconductors. “India can benefit from the global rebalancing of supply chains. A domestic electronics industry is capable of churning $1 Trillion in GDP and creating millions of jobs. We have already set up a business to seize the opportunity," he added.

Semiconductors are the brain behind any electronic technology. Earlier, the key players in the supply chain were limited to China, South Korea, and Taiwan. However, post the pandemic, there is a substantial shift in other country’s reliance on China. In addition to that, manufacturing plants in South Korea and Taiwan shut closed due to COVID-19.

On the one hand, where plants were being shut, on the other hand, there was a sharp increase in the demand for electronic devices like smartphones, laptops, etc. The confluence of both phenomena led to a global shortage of silicon chips. The deficit of chips is projected to last till 2022.

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With Tata tapping in on the toppling sector of chips and semiconductors, it can hugely benefit the auto industry as semiconductors in cars are used in myriad ways such as fuel-pressure sensors, navigation displays, instrument consoles, speedometers, etc. Tata Motors, including other subsidiaries, can proliferate profits as the automotive giant recently announced that its subsidiary Jaguar-Land Rover would incur huge losses due to the lack of silicon chips in the United Kingdom.

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