Reliance Industries Investigating Possibility of Entering Semiconductor Manufacturing Industry, Seeking Partnerships: Source
According to two individuals familiar with its plans, Reliance Industries, owned by billionaire Mukesh Ambani, is now considering entering the semiconductor manufacturing industry. This strategic move aims to fulfill the company’s supply chain requirements and meet the increasing demand for chips in India.
Encouraged by India’s government, the telecoms-to-energy conglomerate has held early talks with foreign chipmakers with potential technology partners, said one person with direct knowledge of the plans.
“There’s an intention, there’s no timeline,” said the person, adding that Reliance has “yet to make a call on whether they ultimately want to invest.”
The names of the foreign chip manufacturers were not immediately available.
The sources were not authorized to speak to the media and declined to be identified. Reliance, whose interest in semiconductor manufacturing has not been previously reported, did not respond to repeated requests for comment.
India’s IT ministry and Prime Minister Narendra Modi’s office also did not respond to requests for comment.
Modi has announced that he wants his country to become a chip manufacturer for the world, but the goals set for 2021 have experienced setbacks. There are no chip factories in the country yet, although India’s Vedanta and Taiwan’s Foxconn are both looking for construction sites.
Reliance credits the entry into semiconductors as the move would help protect against a chip shortage that could affect its telecom and electronics businesses, the sources said. For example, in 2021, the conglomerate delayed the launch of an affordable smartphone it developed with Google citing a chip shortage.
The demand for semiconductors in India and globally is also increasing, they stated. The Indian government has predicted that the domestic chip market will be worth $80 billion by 2028, up from $23 billion currently.
Reliance, with a market value of about $200 billion, would be one of India’s best-placed companies looking for semiconductors, said Arun Mampazhy, former India head of US chipmaker GlobalFoundries.
“They also have deep pockets and know how to work with the government,” he said.
However, chip manufacturing is an industry that has historically been plagued by ups and downs and requires a lot of expertise.
“Getting a technology partner through joint ventures or technology transfer is a crucial factor” for Reliance, said Mampazhy.
India’s chip goals have faced setbacks despite the government offering $10 billion in incentives.
The $19.5 billion venture between Vedanta and Foxconn collapsed in July before it even got off the ground as the two sides struggled to find a technology partner with Foxconn complaining that the project had not moved fast enough.
Foxconn has since decided to invest in India without Vedanta.
ISMC’s plans between Abu Dhabi-based Next Orbit Ventures and Israel’s Tower Semiconductor to invest $3 billion in India have moved slowly amid Intel’s bid to acquire Tower. Negotiations between Intel and Tower later failed.
For months, Reliance has been mulling a $300 million investment that would give it a 30 percent stake in the company, said a third source with direct knowledge of the discussions.
Next Orbit Ventures and Tower did not respond to requests for comment.
