Titan's TEAL bets big on semiconductor & aerospace exports

Titan Engineering & Automation Ltd (TEAL) is bullish on semiconductor and aerospace equipment manufacturing, as the Titan Company subsidiary sees growth in both segments where it provides precision manufacturing and automation solutions.

“With AI being adopted in every item, we will need more chips. Countries are now looking at de-risking themselves by having some supply chain of building chips on their own. If your defence equipment is dependent on chips all coming from China, there is an inherent threat,” Neelakantan P Sridhar, managing director and chief executive of the Tata Group company, told ET.

Besides the semiconductor and aerospace equipment manufacturing segments, TEAL also provides automation solutions for various other industries.

In the semiconductor industry, TEAL makes wafer fab equipment which are used to produce chips and also exports over 800-1,000 critical parts for the aerospace domain, he said.

With the Tata Group partnering with Taiwanese contract manufacturer Foxconn to manufacture iPhones in India, Sridhar said TEAL has the capability to supply equipment for the plant, but refused to say if any formal talks are happening on this.

Last year the company, based in the industrial area of Hosur in Tamil Nadu bordering Bengaluru, announced a Rs 400 crore investment at the Global Investor Summit held in Chennai. Most of this will be used for capital expenditure and part of it will go in importing more than 80 CNC machines used in precision manufacturing. With this, TEAL hopes to achieve revenue of Rs 900 crore in the current financial year, compared with Rs761 crore for FY24.

TEAL was the watchmaking unit for Titan in the 1990s which later developed capabilities offering precision manufacturing and automation solutions. "For semiconductor wafer equipment, most of our components from here go to Singapore. So East Asia will be one of our biggest areas for semiconductor equipment and the USA," the MD said.

In the aerospace segment, TEAL manufactures critical and high precision components that go into engine, engine accessories, air management systems, landing systems and actuation control systems for companies such as Raytheon, Pratt & Whitney and Delphi Engineering.

“We are working with marquee customers in aerospace. We are already seeing contracts coming our way because many aircraft are being ordered in India,” Sridhar said. For aerospace, most of TEAL’s exports are for the US and French markets. Sridhar said until Boeing and Airbus start building aircraft in India, it's very unlikely that the company’s proportion of 90% exports and 10% domestic market will change.

Speaking about the overall manufacturing ecosystem in India, he said exporting equipment in these domains is a big market for India. “China in December had an export surplus of $1 trillion. Their overall trade is equal to India’s GDP. We need to export," he said.

The company is also observing the Middle East. “They are getting aggressive about diversifying out of oil and giving a lot of incentives for companies to come in and do manufacturing there,” Sridhar said. With new greenfield investments happening, TEAL sees demand for automation and equipment.