Amidst a global shortage of semiconductor chips, the Tata Group looks all set to venture into the semiconductor manufacturing business. This will not only help it capitalize on a massive opportunity but, in the long run, even lead to reduced waiting time for Tata Motors vehicles. “At the Tata group, we have already pivoted into a number of new businesses like electronics manufacturing, 5G network equipment as well as semiconductors, in all probability,” Chairman N Chandrasekaran said at the annual general meeting of the IMC Chamber of Commerce and Industry.
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Currently, the global supply chains of the semiconductor chip are heavily dependent on China but in the post-pandemic world, things won’t be the same as several businesses will be seen shifting out to other locations. “On rebalancing supply chains, India can benefit from global shifts. The Tata group has already set up a business to seize the promise of high-tech manufacturing for electronics. A domestic electronics industry could unlock $1 trillion in GDP and create millions of jobs,” Chandrasekaran said.
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The development takes place right when the automobile industry across the globe is facing a huge shortage of semiconductors, which has, in turn, lead to dwindling profits. Semiconductors are used in various components of vehicles, including infotainment units, instrument consoles, fuel-pressure sensors, etc. Setting up production plants of semiconductors is a resource-intense activity and so far, not even a single such facility has been set up in the country. Tata’s foray into the semiconductor business will not only help the group provide important components to Tata Motors and Tata Power but even several other carmakers who have been suffering from low supply of semiconductor chips. It will also help Jaguar Land Rover as the luxury carmaker could make heavy losses in the next quarter owing to the semiconductor shortage in the United Kingdom.
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“Based on recent inputs from suppliers, we now expect chip supply shortages in the second quarter ending September 30, 2021, to be greater than in the first quarter, potentially resulting in wholesale volumes about 50 per cent lower than planned, although we are continuing to work to mitigate this,” JLR commented.
Via Business Standard
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