Automakers must engage with local chip manufacturers: Maruti Suzuki MD & CEO

As the usage of semiconductors in automotive applications rises, India cannot afford to rely solely on chip imports, says Maruti Suzuki managing director and CEO Hisashi Takeuchi.

“In my view, the electronics part manufacturers must actively engage with local semiconductor manufacturers from now on. By collaborating early and specifying our needs, we can ensure that the chips required by the industry are developed and produced locally, further reducing the dependency on external sources,” Takeuchi says at ACMA Annual Session 2024.

One of the most critical components in India’s journey to become self-reliant is the semiconductor, says Takeuchi.

“The Government of India has recognized this challenge and has initiated ‘India Semiconductor Mission’ to set up semiconductor fabs and ATMPs that are Assembly, Testing, Marking, and Packaging facilities in the country. Five such facilities have already been announced. This will give a big Aatma-Nirbhar boost to the Indian industry and Indian auto industry,” says Takeuchi.

Minister of Road Transport and Highways Nitin Gadkari says auto components imports will decrease as the auto industry looks to use locally produced semiconductors and lithium-ion cells shortly.

This comes days after Israel’s Tower Semiconductor and Adani Group secured approval from the Maharashtra government to establish a semiconductor manufacturing plant in Panvel, Maharashtra with a total investment of ₹84,947 crore. In the first phase, the facility will have the capacity to manufacture 40,000 wafers per month, expanding to 80,000 wafers per month in the second phase.

India, aiming to establish itself as a major semiconductor hub like the United States, Taiwan, and South Korea, has approved five key semiconductor plants, including one fabrication plant and four assembly and testing facilities. These projects, which have all undergone a rigorous approval process, include an $11 billion fabrication plant by Tata Electronics in partnership with Taiwan's Powerchip and assembly plants by the Tatas, US-based Micron Technology, Murugappa Group’s CG Power in collaboration with Japan’s Renesas, and Kaynes Semicon. India’s semiconductor mission has an outlay of ₹76,000 crore.