TOKYO -- India's Tata Group will begin producing semiconductors in the country within a few years, a move that the chairman of the group's main company said will make the South Asian country a key part of global chip supply chains.
In an interview with Nikkei Asia in Tokyo on Thursday, Tata Sons Chairman Natarajan Chandrasekaran revealed that the conglomerate plans to launch new businesses in emerging fields such as electric vehicles.
"We have created Tata Electronics, under which we are going to set up a semiconductor assembly testing business," Chandrasekaran said, referring to an electronic components manufacturer that the group founded in 2020.
"We will have discussions with multiple players," the chairman added, raising the possibility of partnerships with existing chip manufacturers. Launching a chipmaking business on its own is a challenge for an inexperienced company.
Semiconductor manufacturers and foundries in the U.S., Japan, Taiwan and South Korea are seen as potential partners. Tata already announced a semiconductor design and development partnership with Renesas Electronics in June.
Chandrasekaran also said Tata will "look into the possibility of eventually launching an upstream chip fabrication platform." The upstream process of wafer fabrication is more challenging both technologically and financially than the downstream steps of assembly and testing.
Tata's move into chipmaking will break new ground for India, where the semiconductor market is set to more than double between 2021 and 2026 to $64 billion, according to the India Electronics and Semi Association and others. The country now has virtually no semiconductor industry, other than software-based design, although demand for semi-intensive products such as smartphones and electric vehicles is growing rapidly.
Momentum is building to diversify chip supply chains, which are at present concentrated in East and Southeast Asia, following the global chip shortage and U.S.-China tensions. The ongoing U.S.-China "decoupling" in chip-related technology is leading major chipmakers to seek more diversified supply-chain locations. Both Tata and the Indian government seek to capitalize on this shift to position the country as a new semiconductor hub.
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