Automated tape layup (ATL) largely employs post manufacturing manual visual inspection techniques for defect detection, which severely affects the productivity. Inline monitoring and defect prediction can help in making the process faster and more reliable. The presented work details the use of thermography as an inspection tool for thermoplastic tape material. A new online monitoring system is developed containing Infrared camera integrated on a purpose build ATL test rig. The capability of the tool to identify various defects is analyzed. Moreover, detailed temperature and cooling behavior analysis is done for defect prediction.