Tata Motors, the largest electric vehicle maker in India, and Japanese chip maker Renesas Electronics are teaming up to design and develop semiconductor solutions, the companies have announced. The news comes as the electronics and automotive industries have been disrupted by a continuing global shortage of semiconductor chips.
The partnership is also expected to help Tata Motors overcome the global car chip crisis, which has hit the company’s revenues and led to production cuts and even brief plant closures.
The chips, made in partnership with Renesa, will also be useful for Jaguar Land Rover’s upcoming and existing electric vehicles.
It was said that Renesas would work with Tata Motors to accelerate the development of electric and connected vehicles. As reported, Natarajan Chandrasekaran, chairman of Tata Sons, a Tata holding company, believes that this collaboration will “accelerate our presence in these areas”. India as well as globally”.
The two companies are interested in working together in areas such as wireless network solutions such as 5G, as well as upcoming automotive technologies such as advanced driver-assistance systems (ADAS). Renesas will produce goods initially for the Indian market and later for the global market in collaboration with the Tata Group’s Tejas network.
Last year it was reported that the Tata group is looking at setting up an outsourced semiconductor assembly and test (OSAT) plant in Telangana, one of the three southern states being considered by the group.
An OSAT plant, expected to cost $300 million, package, assembles and tests foundry-made silicon wafers, turning them into complete semiconductor chips that will be useful to Tata Motors. The facility is also expected to create 4,000 jobs.
The government has unveiled a plan worth around $10 billion to woo chipmakers across the world to start operations in India. Vedanta-Foxconn, ISMC, and IGSS Venture are the three consortiums that have submitted applications for financial assistance to set up the chip factory.
However, by 2026, it is estimated that the Indian semiconductor industry will reach $64 billion driven by growing demand for mobile and wearable devices from the industrial and IT sectors as well.
According to a report by the Indian Electronics and Semiconductors Association (IESA), the share of locally produced components will increase from just 9% in 2021 to 17% by 2026, as a result of government actions to support semiconductor manufacturing in the country.
The report said: “The locally sourced semiconductor market is poised to grow at a CAGR of 30% from $1.7 billion in 2019 to $11.0 billion in 2026. These astonishing numbers have contributed to the establishment of manufacturing sites across India. It is possible because of the government’s support.”
Meanwhile, the worldwide semiconductor market is expected to reach $1 trillion by 2030, up from $440 billion in 2020.
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