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India will fill the gap in supply chain disruption, says Tata Sons chairman on chips shortage

Tata Electronics (OSAT) is in talks with Tamil Nadu, Karnataka, Telangana and Odisha for setting up a fab unit
Last Updated 13 July 2022, 09:15 IST

Many companies were forced to make their business plans based on supply and not on demand as the normal practice due to supply chain disruption during the Covid-19 pandemic, Tata Sons Chairman N Chandrasekaran said on Wednesday, with the global shortage of chips used in automobiles, mobile phones among others weighing heavily on his mind.

Addressing the 59th convocation ceremony of the prestigious Indian Institute of Technology-Madras (IIT-M) here, Chandrasekaran said the solutions for solving the supply chain issues will come out of India, as he reiterated the salt-to-software conglomerate’s plans to venture into semiconductor manufacturing and packaging.

Congratulating the graduating students for beginning their career at an “exciting time and definitely so in India”, the top executive asked them to think of the "art of possible" by imagining without the “burden of experience.”

“Experienced people have a burden. When we decide to do something, we think nahi hoga, this is not possible. But you don’t have that burden. I would encourage you and invite you to think of a world what it can be 50 years from now,” Chandrasekaran told the graduates.

Also read | Chip shortage caught companies off-guard since supply chain not diversified: FADA President

Talking about the changes that the corporate world has undergone after the pandemic, Chandrasekaran said companies can neither have complete Work From Home option nor can be limited to being in physical spaces and cannot have fixed hierarchical structures.

“The companies will have to give less importance to titles and have to transform themselves to be able to accommodate networks and tap talents from India and elsewhere,” Chandrasekaran added. He also contended that the future is “digital” and said there will be no industry in the future that will not be dependent on chips.

With many automobile majors, including Tata Motors, continuing to suffer for shortage of chips due to supply chain problems during the pandemic, Chandrasekaran spoke about the issue to drive home the point to adapt technological advancements and sort out issues with regard to supply.

“The world supply chain has been defined over several decades to be efficient and agile. Only two things mattered -- Lowest cost and speed. But now business plans are based on supply and not on demand. For the first time, I had to formulate my plans on supply. We need to fix the supply chain issue,” Chandrasekaran said.

“I am of the opinion that the availability and resilience (of supply chain) is going to happen out of India. I always talk about an India-plus model which consists of a vast number of things -- Semiconductors, batteries, new materials, and new formulations. These require talent, more so tech talent,” he added.

Semiconductor is identified as a "sunrise sector" with the Centre wooing several global majors through a Rs 76,000-crore production-linked incentive. Foxconn, Singapore’s IGSSV and a few other global companies have expressed interest in investing huge money in the country.

Tata Electronics (OSAT) is in talks with Tamil Nadu, Karnataka, Telangana and Odisha for setting up a fab unit. However, no final decision has been taken.

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(Published 13 July 2022, 09:15 IST)

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