Chairman N Chandrasekaran said on Monday that the Tata group is aiming to get into semiconductor production and has set up a subsidiary to take advantage of the potential.
“At the Tata group, we have already pivoted into a number of new areas including electronics manufacturing, 5G network equipment, and, in all likelihood, semiconductors,” he remarked at the IMC Chamber of Commerce and Industry’s annual general meeting.
In a post-pandemic future, Chandrasekaran predicted that global supply chains, which are currently strongly reliant on China, would undergo significant changes, with firms moving their dependency to other countries.
“In terms of supply chain rebalancing, India may gain from global shifts. The Tata group has already established a company to capitalise on the potential of high-tech electronics manufacturing. He claims that a domestic electronics industry could generate $1 trillion in GDP and millions of employment.
The Tata group chairman’s comments come at a time when semiconductor shortages are wreaking havoc on the industry. Semiconductors are utilised in a variety of applications, including fuel-pressure sensors, digital speedometers, and navigation displays. Semiconductor production necessitates large investments, and India currently lacks such a facility. The Vedanta group, which just became the highest bidder for Videocon, is also considering a move into the semiconductor business.
A move into the semiconductor sector will enable the Tata group to supply these critical components to Tata Motors and Tata Power, as well as other businesses around the world.
Tata Motors recently announced that its Jaguar Land Rover division would lose a significant amount of money in the coming quarter due to a shortage of semiconductors in the United Kingdom.
Jaguar Land Rover JLR warns of chip supply shortfall in the second quarter ending September 30, 2021. JLR says it is “continuing to try to mitigate” the problem. Last month, JLR warned sales in the July-September quarter would fall short of expectations.
Tata Motors’ stock ended the day at Rs 298 a share, down 0.6 percent from its previous high of Rs 355 a share. Tata Motors and Jaguar Land Rover will miss their sales forecasts, and Tata’s stock has been falling since the announcement.
Regarding Tata Digital’s digital initiatives, Chandra stated that the company is developing numerous platforms, including a consumer offering that includes retail, travel, financial services, health, and education.