Tata’s move comes on the back of the group’s entry into the 5G telecom equipment manufacturing space by acquiring a majority stake in Tejas Networks, which will pit it against the likes of global gear makers such as Ericsson, Nokia, Huawei and Samsung.

Mumbai: The Tata Group is set to enter semiconductor manufacturing, aiming for a slice of the high-tech electronics manufacturing market pegged at $1 trillion, its chairman said.

“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,” N Chandrasekaran said at an industry event on Monday.

Tata’s move comes on the back of the group’s entry into the 5G telecom equipment manufacturing space by acquiring a majority stake in Tejas Networks, which will pit it against the likes of global gear makers such as Ericsson, Nokia, Huawei and Samsung.

Although Chandrasekaran did not elaborate on the semiconductor manufacturing plans, people aware of the matter said the group could use its new factory in Tamil Nadu for making chipsets. It currently plans to make handsets and handset components there.

Group holding company Tata Sons did not respond to ET’s queries till press time Monday.

Chandrasekaran said changes to the global supply chains, which currently are heavily dependent on China in the aftermath of the pandemic and geopolitical developments, would make businesses shift their reliance on other countries. He called this a huge opportunity for India to become a second base.

“…India can significantly benefit from the geopolitical shifts that we are seeing. At the group, we have already set up a business to seize the promise of high-tech manufacturing of electronics, precision manufacturing, assembly and testing and semiconductors in the medium term,” the chairman said.

Four trends are emerging in the post-pandemic world — rapid digital acceleration, new approach to supply chains, a re-imagination of growth with environmental sustainability at the core and inclusion of health and wellness concerns by every business, he said. “The four themes will play into each of our own existing businesses, and they are also leading to brand new initiatives for the Tata Group.”

The new interest in semiconductors from the steel to software and retail behemoth comes at a time when the group is focussing on the advent of 5G in India. The group is also a large consumer of semiconductors, and is facing a shortage of chips at its automobile business, Tata Motors and its Jaguar Land Rover unit, which is affecting production of top-end cars and SUVs.

The conglomerate’s decisions also run in tandem with the government’s renewed focus in attracting semiconductor fabless manufacturing units in India. Semiconductor manufacturing, which involves building chipsets among other things, requires high investments and India does not have any such facility yet.

The ministry of electronics and IT in March invited expressions of interest for setting up chipmaking facilities in India. The government hopes to come up with an incentive plan in six months, which, as per reports, may involve offering around $1 billion in cash to every company that sets up a chip-manufacturing unit.

The proposed incentives could attract two-three large investments worth a cumulative Rs 70,000-80,000 crore, for setting up specialty fab units, Rajeev Khushu, chairman of the India Electronics and Semiconductor Association, said recently. He is also a senior executive at US chip designer and maker Texas Instruments.

Chandrasekaran said the pandemic had created inequities and pushed for a fast-paced rollout of services to universalise education and healthcare services.

Solving such problems using digital technologies will also create employment opportunities, especially for the low-skilled people, and help create a market, Chandrasekaran said, expecting them to deliver 30 million new jobs.

He said with hybrid working possibilities, a good number of the 120 million women educated till the secondary school level could get jobs, which alone could add $440 billion to India’s gross domestic product.

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