Japanese chipmaker Renesas Electronics Corp and India's Tata Motors have formed a strategic partnership to design, develop and make semiconductor solutions, the firms said on Wednesday.
The move comes as a persistent global shortage of semiconductor chips has hobbled the automotive and electronics industries, among others, forcing production cutbacks, while highlighting global dependence on a few sources, such as Taiwan.
Renesas will collaborate with Tata Motors, India's biggest manufacturer of electric cars, on developing "next-generation automotive electronics" to accelerate the growth of electric and connected vehicles, the companies said in a statement.
"The collaboration will accelerate our presence in these areas in India as well as globally," Natarajan Chandrasekaran, the chairman of Tata holding company Tata Sons, said.
Areas of collaboration eyed by the firms include a non-exclusive partnership on emerging automotive technologies, such as advanced driver-assistance systems (ADAS) as well as wireless network solutions including 5G.
Here Renesas will work with Tata group firm Tejas Networks to make products initially destined for India and eventually global markets.
India is among the countries racing to subsidise domestic construction of factories that turn out semiconductors and displays in an effort to minimise supply risks.
Its plan for $10 billion in incentives has lured applications from firms such as a joint venture between domestic conglomerate Vedanta and Taiwan's Foxconn, and Singapore's IGSS Ventures.
Oil-to-metals giant Vedanta plans to invest $20 billion for two units for chip and display manufacturing while jeweller Rajesh Exports will invest $3 billion in an electronic display plant.
India expects the domestic chip market to reach $63 billion by 2026 from $15 billion in 2020.