Introduction
The Tata Group is making a significant leap in the electronics and semiconductor sectors with an $18 billion investments plan, said N. Chandrasekaran, Chairman of Tata Sons. Speaking at NIT Tiruchirappalli’s Global Alumni Meet (GAM 2025) in Chennai, Chandrasekaran emphasized that this investment marks the group’s commitment to long-term growth in cutting-edge industries.
Overview:
- Massive Investment Plans: Tata Group will invest $18 billion in electronics and semiconductors.
- New Manufacturing Units: Nine factories will be operational within 24 months.
- Upcoming Semiconductor Fab: The Hosur plant is set to start in 2025, with the semiconductor fab operational by 2026.
- Vision for Air India: Chandrasekaran aims to make Air India a world-class airline.
- Focus on AI and Green Energy: The group will also capitalize on AI advancements and sustainability trends.
Tata’s Ambitious Expansion in Semiconductors
Chandrasekaran explained that the journey into electronics and semiconductors is strategic and deliberate. “It’s a long game,” he remarked, highlighting that setting up semiconductor fabs requires meticulous planning and sustained investment. The company’s foray will include precision manufacturing, semiconductor assembly, testing facilities, and design centers.
The Hosur plant, integral to this strategy, is slated for a 2025 launch. By 2026, the group plans to operationalize its semiconductor fabrication facility, a critical move to position India as a global semiconductor hub.
The Tata Group plans to establish nine factories within the next 24 months. As part of its strategic focus on the long-term growth of electronics and semiconductors, the group has allocated $18 billion in investments, according to N Chandrasekaran, Chairman of Tata Sons.
“It’s a long game. You don’t wake up in the morning and say I am going to have a fab tomorrow morning,”
Strengthening India’s Supply Chain
Addressing India’s economic aspirations, Chandrasekaran urged businesses to focus on strengthening domestic supply chains. “India imports even basic materials. We must shift from a reactive mindset to proactive innovation,” he said. He underscored the untapped potential in sectors like automotive, aerospace, pharmaceuticals, and defense.
The Chairman emphasized that robust supply chains are essential to reducing dependence on imports and achieving self-sufficiency in critical industries.
“We are in precision manufacturing, in semiconductors assembly and testing; and then will have a design house. Our Hosur plant should be operational in 2025 and our semiconductor fab in 2026,” he said.
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Tata Group’s Semiconductor Initiatives
The Tata Group has embarked on several significant initiatives to establish a robust presence in the semiconductor industry:
- Semiconductor Fabrication Facility in Dholera, Gujarat: Tata Electronics, in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC), is constructing India’s first semiconductor fabrication plant in Dholera. This facility represents an investment of approximately ₹91,000 crore (around US$11 billion) and is expected to process 50,000 wafer starts per month, producing components such as power management ICs, display drivers, and micro-controllers. The project is anticipated to create over 20,000 direct and indirect skilled jobs in the region.
- Semiconductor Assembly and Test Facility in Jagiroad, Assam: Tata Electronics is establishing India’s first indigenous semiconductor assembly and test facility in Jagiroad, Assam, with an investment of ₹27,000 crore (approximately US$3.6 billion). This facility is expected to produce up to 48 million chips per day, catering to sectors such as automotive, mobile devices, and artificial intelligence. The project is projected to generate over 25,000 direct and indirect jobs and is slated to commence operations by mid-2025.
- Strategic Partnerships and Collaborations:
- Technology Transfer Agreement with PSMC: Tata Electronics has entered into a landmark agreement with PSMC for technology transfer to build India’s first semiconductor fabrication facility. This collaboration aims to enhance Tata’s capabilities in semiconductor manufacturing.
- Collaboration with Tokyo Electron: A memorandum of understanding has been signed with Tokyo Electron to accelerate semiconductor equipment infrastructure for Tata’s facilities in Dholera and Jagiroad. This partnership includes workforce training and the provision of advanced equipment.
- Discussions with Analog Devices: Tata Group is in talks with Analog Devices to explore manufacturing semiconductor products in India, further expanding its footprint in the semiconductor sector.
These strategic investments and collaborations underscore Tata Group’s commitment to building a comprehensive semiconductor ecosystem in India, aligning with the country’s vision to become a global hub for electronics and semiconductor manufacturing.
Global Trends Driving Tata’s Strategy
Chandrasekaran identified three global trends shaping the company’s priorities:
- Sustainability and Green Energy Transition
Energy costs remain a significant challenge for global growth. Chandrasekaran emphasized the need for substantial innovation in renewable energy, highlighting that investments in this area will span decades. - Supply Chain Resilience
The pandemic and geopolitical tensions disrupted global supply chains, particularly in the automotive, healthcare, and electronics sectors. Recent disruptions, like the Red Sea crisis, have underscored the importance of diversifying trade routes. - Advances in Artificial Intelligence (AI)
AI developments, particularly in 2024, showcased the power of multimodal AI models handling text, images, and videos. In 2025, Chandrasekaran expects increased investments in small language models (SMLMs) due to their lower energy consumption and cost efficiency.
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India’s Unique Position
India is well-placed to capitalize on these trends, Chandrasekaran observed. With a burgeoning domestic market, strong demand, and growing exports, the country can emerge as a global leader in electronics, green energy, and AI.
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Conclusion
As the Tata Group embarks on its ambitious expansion, its investments in semiconductors and electronics signal a pivotal moment for India’s industrial landscape.
These efforts align with India’s broader vision of becoming a global manufacturing powerhouse, showcasing the country’s potential for rapid growth and innovation.
The company’s focus on sustainability, advanced technology, and supply chain resilience reflects a holistic approach to long-term growth, ensuring that Tata remains a key player in driving India’s economic transformation.
