Forbes Asia Editors' Pick Indian Conglomerate Murugappa Group Seeks To Enter Semiconductor Space Anu Raghunathan Contributor Opinions expressed by Forbes Contributors are their own. I write about Indian entrepreneurs. Following Click to save this article. You'll be asked to sign into your Forbes account. Nov 26, 2023, 01:05am EST Press play to listen to this article! Got it! Share to
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Twitter Share to Linkedin getty The 123-year-old Murugappa Group is looking to venture into the semiconductor segment with a proposed $790 million plant. This will be an interesting, high-tech addition to the $9 billion (revenue) engineering and financial services conglomerate, which is based in Chennai and operates in 29 industries ranging from auto components to finance to sugar. The expansion will be through group company CG Power and Industrial Solutions, which is based in Mumbai. It filed an application earlier this week with the Indian government’s Ministry of Electronics and Information Technology to seek approval to set up a semiconductor plant. It has also requested a government subsidy to offset some of the costs of setting up the plant. Vellayan Subbiah, a member of the fourth generation of the Murugappa family, is chairman of CG ... [+] Power. Courtesy of CG Power The 86-year-old CG Power is looking to set up an outsourced semiconductor assembly test plant that will provide semiconductor assembly, packaging and testing of circuits. The $790 million investment will be over five years, and will include subsidies and contributions from joint venture partners. CG Power is simultaneously looking to partner with tech providers or anchor customers to help in getting it off the ground. CG Power—which came under the Murugappa fold when the group’s engineering and manufacturing firm Tube Investments of
India took a 56% stake in the debt-ridden company for 7 billion rupees ($85 million)—manufactures industrial machinery and makes everything from motors and drives to transformers and switchgears. MORE FOR YOU Mercury Could Have Glaciers Where Life Exists, Say
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Maryland Factory Rocket Lab Is Laying Copper The Murugappa family—whose fourth- and fifth-generation members run the group—appears on the list of India’s richest at No. 25 with a $7.3 billion fortune. The Murugappa Group’s proposed venture comes on the heels of last month’s announcement by Kaynes Technology India that it was looking to set up semiconductor plant in the southern state of Telangana. The cost of the facility is estimated at a 28 billion rupees ($340 million) by Kaynes Technology, which was recently in the news for supplying electronic systems for India’s historic
moon mission. The Murugappa and Kaynes proposals stand to benefit from the Indian government’s 760 billion rupees ($9.3 billion) production-linked incentive scheme announced in December 2021 to reduce import dependence and for providing financial support to companies that are looking to engage in the development of semiconductors and display manufacturing segments. This is with the view to make India a global hub for semiconductor manufacturing. “More and more groups in India will be showing an interest in getting into semiconductors,” says Sanjay Gupta, charman of the Indian Electronics and Semiconductor Association (IESA), an industry body. “But what is key is that they should have the right technology partner in the semiconductor domain. The challenge is to have the right technology adoption and skilled workers to take this forward.” Mining magnate Anil Agarwal had struck a partnership with Taiwan’s Foxconn in February 2022 to get a semiconductor joint venture off the ground. But just 16 months into the joint venture, the deal was called off and Foxconn pulled out of the partnership without citing a specific reason. Vedanta has not announced any new partners yet. “There is no dearth of money for projects,” says IESA’s Gupta. “But what we need is a collaborative mindset.” MORE FROM FORBES MORE FROM FORBES India's 100 Richest 2023: A Dramatic Reshuffle In The Top Ranks Keeps Collective Wealth Flat By Naazneen Karmali MORE FROM FORBES Supplying Electronics To India's Moon Mission Made This Electrical Engineer A Billionaire By Anu Raghunathan MORE FROM FORBES Indian Healthcare Billionaire Ranjan Pai Bets $170 Million On Beleaguered Edtech Firm Byju's Test-Prep Unit By Anu Raghunathan Follow me on Twitter . Anu Raghunathan Editorial Standards Print Reprints & Permissions