Tata’s Global Semiconductor Strategy: A New Era of Collaborations with Singapore
- Moksha M Munoth
- Nov 17, 2024
- 3 min read
Tata Sons has taken a major leap in the semiconductor sector by choosing Singapore as a pivotal partner for its expansive plans. This development was formally announced following a significant meeting between Tata Sons Chairman N Chandrasekaran, and Singapore’s Minister for Home Affairs and Law, K Shanmugam in November 2024.
Notably, this collaboration comes at a time when Tata Group's presence in the semiconductor domain is strengthening, with Noel Tata recently appointed as a nominee director on the board of Tata Sons, a position that marks the re-entry of the Tata family into dual board roles since 2011.
The decision by Tata Sons to choose Singapore as a "key partner" reflects a deliberate strategy. During discussions, Chandrasekaran emphasized Singapore’s reliability and the deep historical ties between the Tata Group and the country, which span over approximately fifty years.
“If they (Tatas) want to, they can do business with anybody in the world. It’s not that they need to do it in Singapore, but they will, I think, choose Singapore as a key partner, not only partner, but as a key partner” Shanmugam underscored.
Semiconductor Supremacy : Singapore's Steady Growth and India's Expanding Horizons
While India and Singapore are geographically and demographically distinct, both nations have carved out significant positions in the semiconductor industry. The latter, despite its compact size of 670 square kilometres, is home to 25 semiconductor foundries, which collectively account for about 20% of the world's semiconductor equipment production.
Singapore’s semiconductor sector, valued at $35 billion in 2023, is a critical driver of its economy, contributing about 7% to its GDP. The nation's role is bolstered by its robust infrastructure, which facilitates about 10% of the world's semiconductor output and 5% of wafer fabrication capacity.
With major players like Qualcomm, Broadcom, and Micron operating there, Singapore has cemented its place as a significant player. The market is set to grow at an impressive rate of 10.33% annually, potentially reaching $70.91 billion by 2029.
For India, the semiconductor industry is burgeoning. The country’s market size is projected to expand from $26.3 billion in 2022 to $109 billion by 2030. Tata Group’s ventures are poised to capitalize on this growth. A prime example is the substantial investment of Rs 91,000 crore to establish an AI-driven semiconductor fabrication facility in Dholera, Gujarat, in collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC).
Additionally, the conglomerate is investing another Rs 27,000 crore in a semiconductor assembly and testing unit in Assam. The Gujarat project, in particular, seems to align with India’s ongoing focus on turning the state into a technological hub — though, one can't help but notice how often these grand projects are concentrated there.
Bilateral Ties and the Road Ahead
Minister Shanmugam’s visit to India, accompanied by Tan See Leng, Singapore’s Minister for Manpower and Second Minister for Trade and Industry, underscored the broader objectives of the partnership. “Semiconductors was a big discussion point in Singapore when the Indian Prime Minister Narendra Modi visited the country recently,” Shanmugam shared.
It was also highlighted that Singapore’s robust supply chain and equipment production capabilities offer substantial opportunities for partnership in areas beyond semiconductors, such as industrial parks, logistics, and green energy.
The synergy between the two countries is not only a result of corporate strategies but also reflects growing diplomatic ties. Earlier this year, India and Singapore entered into a bilateral pact aimed at deepening cooperation in the semiconductor field. This agreement is set to pave the way for a more comprehensive collaboration, enabling both nations to leverage their strengths.
As India ramps up its semiconductor ambitions with projects like the ones in Gujarat and Assam, the collaboration with Singapore is like offering a promising avenue to streamline efforts. Singapore’s robust infrastructure and established supply chain capabilities are expected to accelerate the Tata Group’s semiconductor projects, ensuring that both countries remain competitive in the fast-evolving tech landscape.
In a global market driven by technological advancements, semiconductors have become the backbone of modern economies. The potential for growth is immense, particularly as the industry continues to face challenges like supply chain disruptions and technological bottlenecks.
As India's semiconductor sector surges forward, collaborations like these could be the key to unlocking the full potential of its digital aspirations. And, of course, while Gujarat may be getting the lion’s share of attention, one can only hope that other regions see their fair slice of the semiconductor pie soon enough.
