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[Asia Economy Reporter Lee Ji-eun] India's major conglomerate Tata Group plans to invest 118 trillion won over five years to foster the country's semiconductor industry, the Nihon Keizai Shimbun reported on the 9th (local time). Some predict that with Tata Group's investment, India could emerge as a semiconductor production hub replacing China.
In an interview with Nihon Keizai the day before, Tata Group Chairman Natarajan Chandrasekaran stated, "We have selected semiconductor production as a new business sector for Tata Electronics." Regarding the investment plan, he indicated intentions to collaborate with foreign companies, saying, "We will consult with multiple parties."
Tata Group plans to expand its semiconductor production system from post-processing, such as chip packaging, to wafer manufacturing and front-end processing involving circuit engraving. To this end, it will invest $90 billion (approximately 118 trillion won) over five years. Considering Tata Group's total revenue last year was 9.6 trillion rupees (about 157.5369 trillion won), this is a massive investment. This investment is expected to create 935,000 new jobs in India.
The reason Tata Group is entering the semiconductor industry is that it judged a stable semiconductor supply source is necessary for its core business of automobile manufacturing. Last year, due to difficulties in semiconductor supply caused by COVID-19, Tata Motors experienced fluctuations in vehicle production. Moreover, electric vehicles require more semiconductors in the manufacturing process than internal combustion engine vehicles, making a more stable supply source essential.
The Nihon Keizai forecasted that this investment could mark the point at which India becomes a semiconductor production hub replacing China. Recently, as the United States has strengthened export controls on semiconductor production equipment to China, semiconductor companies are accelerating their decoupling from China. In fact, Apple is reportedly considering moving its iPad production line from China to India.
The Indian government has also decided to support the semiconductor industry with 760 billion rupees (about 12 trillion won) to turn this situation into an opportunity. Nihon Keizai stated, "India's private companies and government are working together to foster the semiconductor industry," adding, "With investment from a leading conglomerate, India is increasingly likely to become a key player in the global semiconductor supply chain."
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