Bharat Electronics Limited (BEL), a leading state-owned defence electronics company in India, has signed a Memorandum of Understanding (MoU) with Tata Electronics to jointly develop indigenous semiconductor and electronics solutions. The agreement, signed on June 5 at Tata Group's headquarters in Mumbai, underscores India's ambition to achieve self-reliance in critical technology sectors.

The strategic partnership will focus on collaborative opportunities in semiconductor fabrication, outsourced semiconductor assembly and test (OSAT), and design services. Tata Electronics and BEL will also work together on key components such as microcontrollers (MCUs), systems-on-chip (SoCs), and monolithic microwave integrated circuits (MMICs). The alliance aims to leverage knowledge sharing and best practices to improve BEL's manufacturing efficiency and technology capabilities.

BEL, founded in 1954 and operating under India's Ministry of Defence, reported strong financials in FY2024–25, with turnover rising 16.17% to Rs 23,024 crore and profit after tax growing 31.55% to Rs 5,288 crore. The company also launched 40 new products during the year and derives 77% of its revenue from indigenously developed technologies. BEL plans to increase its non-defence revenue share to 30% and is targeting 15–17% overall revenue growth in FY2025.

BEL's stock was trading at Rs 390.90 on June 6, near its 52-week high, with a 1-year return of over 25%, and a five-year return of 1,575%, signaling strong investor confidence.

Meanwhile, Tata Electronics continues to expand its semiconductor footprint globally. According to a June 7 research report from PublicInvest Research, Tata is exploring the acquisition of semiconductor facilities in Malaysia, including potential deals with specialty foundry X-Fab, OSAT provider SilTerra Malaysia, and sensor manufacturer Globetronics Technology.

The acquisition effort is reportedly led by KC Ang, former VP of operations at SilTerra and now President of Tata Semiconductor Manufacturing. Analysts suggest that acquiring a Malaysian facility would give Tata access to a well-established semiconductor ecosystem and help mitigate tariff-related risks while serving a broader global market.

Tata Electronics has been actively building its semiconductor capabilities since its founding in 2020. In September 2024, the company partnered with Taiwan's Powerchip Semiconductor to construct India's first chip fabrication plant in Dholera, Gujarat.

Malaysia, where about 13% of the world's chip testing and packaging takes place, is pursuing a $5.3 billion National Semiconductor Strategy to become a hub for advanced chip design and packaging. The government has also partnered with Arm to establish a design base in the country and is building Southeast Asia's largest IC design park.

The partnership between BEL and Tata, alongside Tata's international ambitions, highlights India's growing role in the global semiconductor value chain and signals a broader strategic shift toward self-reliance and international competitiveness in the electronics sector.