Motherson Group ready to make chips, looks for a global partner

The $10-billion Samvardhana Motherson Sumi Group is eyeing an entry into the semiconductor space and is scouting for a global partner. The Indian conglomerate, with 29 different joint ventures, has already acquired 300 acres on the outskirts of Chennai to help achieve the government’s Make in India objective and build capabilities in an industry that provides significant content to each new-age vehicle. The group plans to invest $1 billion in the next three years as part of its capex plan.

Laksh Vaaman Sehgal, vice-chairman, Samvardhana Motherson, told ET that the investment to get into semiconductor manufacturing is large; so the company won’t get into the space on its own and is eyeing a partner.

“As part of ‘Make in India, make with Motherson’ internal initiative, we have set up a 300-acre industrial park in Chennai to bring in good manufacturing partners into the country,” Sehgal said. “If someone can bring the semiconductor technology and is looking for an Indian partner, we are there. We are actively looking at the space. If a global giant wants an Indian partner to set up shop, we are open for an alliance.”

The Tata Group and the Vedanta Group have both committed to investing in the semiconductor space in India. New Delhi will also be incentivizing investment into localization of chips, the shortage of which has already led to losses of billions of dollars in lost revenue in the country’s automotive market.

India’s semiconductor requirement is expected to grow at 33% annually between 2020 and 2026 to reach $63 billion, driven by higher usage of wireless communication, consumer electronics, and automotive. These three segments are likely to account for about 20-24% of the total semiconductor requirement of the country.