Tata Electronics to scale up precision manufacturing with $10 billion boost
Tata Electronics Private Ltd (TEPL) plans to ramp up its business with an aggregate $10 billion investment by 2027 as it targets to become a crucial precision components manufacturer in the global supply chain. The company will invest ₹7,000 crore for the expansion of its Hosur plant to ramp up the assembling of iPhones. It has a casings facility in Hosur, Tamil Nadu, where the company employs about 10,000 women workers.
Tata Group had signed a binding share purchase agreement with SMS InfoComm (Singapore) and Wistron Hong Kong Limited to acquire 100% equity stake in Wistron Infocomm Manufacturing (India) for $125 million in November last year. WIstron India has four assembly lines for iPhone production at its Malur plant in Kolar district, Karnataka, which employs 14,000-15,000 people. The acquisition of Wistron unit will help Tatas to do the end-to-end assembling of iPhones in India.
Tata Electronics is the first Indian company to become a contract manufacturer for iPhones, apart from Taiwan's Foxconn, Pegatron and Wistron, especially when Apple looks to diversify its manufacturing away from China.
The holding company of Tata Group, Tata Sons plans to invest $90 billion by 2027 and most of it is expected to go to new businesses because every traditional business can fund its growth. "We want to be future-ready and create future businesses with strong balance sheets in the next five years. We want to see what impact we can make on society. A lot of things we can do in scale," said N Chandrasekaran, chairman, Tata Sons earlier in an interview.
The group invests about $1.5 lakh crore a year as part of its growth strategy. In the five years until FY22, the holding company Tata Sons has invested ₹110,000 crore in group companies. The capital investments in new high-tech businesses could rise from a quarter to half of the overall investment by 2027, say company officials.
Tata and Airbus will be investing ₹20,000 crore in the defense aircraft manufacturing plant. Air India could see over $20 billion investment in the acquisition of new aircraft. Tata Electronics with its semiconductor and precision components may witness over $10 billion investment. Tata Digital, which owns the SuperApp Tata Neu, is also getting investments from Tata Sons to grow its e-commerce business.
In 5G equipment, semiconductors and EV battery manufacturing also, Tata Group looks to become part of global supply chains. "Our aspiration is not only for supplying to our companies or the country but for the global market, said Chandrasekaran.