Five Key Developments That Hint At Tata Group's Increasing Role In India's Quest For Atmanirbharta In Electronics Manufacturing

Piecing together developments as recent as this week, to last month, to ongoing efforts for a year or two, as well as indicated intentions for the future, it appears that Tata Group is likely to play a key role in India's quest for self sufficiency in electronics manufacturing. Here are five of those compiled by Swarajyamag for a quick read.

#1. In October 2020, it was reported that "Tata Group is investing Rs 5,000 crore to set up a phone component manufacturing plant at Tamil Nadu's Hosur under a new company which has been named Tata Electronics" .

It was also mentioned that "It is believed that the facility will be used by Tata Group to manufacture components for Apple Inc which is looking to expand its sourcing base from China" and that "The project brings along a huge employment generation capacity as by October 2021, the facility will have a staff strength of 18,000 people. the company has decided that 90 per cent of this staff size will be women".

Though Tata group has not yet given any details officially of either the plans or the progress, a Twitter handle @UpdatesChennai tweeted in January 2022 that the facility is "Expected to open in mid-2022" and also had some pictures.

#2. In November 2021, Reuters reported that "Tata group is in talks with three states to invest up to $300 million to set up a semiconductor assembly and test unit". On 15 December 2021 when India announced its schemes for creating a semiconductor ecosystem with an initial overlay of $10.2 billion as incentives, eligible applications for "Outsourced Semiconductor Assembly and Testing" (OSAT) could get fiscal support of up to 30 per cent of capital expenditure and applications are open till 1 January 2025.

In an exclusive interview given to Swarajyamag in January 2022, Tata Electronic's CEO for OSAT division Sri Raja Manickam shared a lot of insights into the way the group is thinking. Indications are that the group may be close to submitting its formal application for OSAT unit.

When asked about Tata Group getting into other segments of semiconductor business like fabs, he mentioned that he is working for OSAT at Tata, but also added that "I believe it is natural to get into up and down the supply chain. Recently, the pandemic has exposed flaws in the current supply chain where there are too many touchpoints and too many dependencies. There is a drive to be more vertically integrated within a company or within a geography or meaningful partnerships".

#3. In July 2021, Tejas networks which "designs, develops and sells high-performance networking products to telecommunications service providers, internet service providers, utilities, defence and government entities in over 75 countries" announced "a strategic investment from Panatone Finvest Limited, a subsidiary of Tata Sons Private Limited, for a controlling stake in the company".

Analysts had then calculated that "Tata Sons has moved to acquire a total of 69.35% stake in listed telecom firm Tejas Networks in a deal which will bolster the conglomerate Tata group’s 5G capacity".

#4. On 30 March 2022, Tejas network announced that it has "signed definitive agreements to acquire 64.40% of shares of Saankhya Labs Private Ltd. Bangalore (“Saankhya”) for Rs 283.94 Cr in cash. The initial acquisition of Saankhya shares is expected to close within the next 90 days. Tejas Networks, upon procuring all necessary consents and approvals, also intends to proceed with acquiring the balance 35.60% shares through a merger process or a secondary acquisition".

Saankhya is a fabless semiconductor design company founded in 2007 and has developed a wide range of system and semiconductor products for cellular wireless, broadcast radios and satellite communication ground-terminal, which are deployed by customers in India and in international markets.

#5. As per a report on 7 April 2022, "BSNL has awarded a contract worth Rs 550 crore to Tata Consultancy Services (TCS) for setting up 6,000 4G sites across the country". As per the report "BSNL was asked by the government to utilise equipment from domestic companies only".

Tata Group may be benefitting already from some of its recent acquisitions. More details of some of these efforts as well as new developments are expected in the near future.