Billionaire Mukesh Ambani’s Reliance Industries has started exploring entry into semiconductor manufacturing, a move that could meet its supply chain needs and meet growing chip demand in India, two people familiar with its strategy said. people said.
The telecom-to-energy group promoted by the Indian government has held early-stage talks with foreign chipmakers that have the potential to become technology partners, a person with direct knowledge of the plans said.
“The intention is there, there is no deadline,” the person said. He said Reliance “has not yet decided on whether they ultimately want to make the investment or not.”
The names of foreign chip makers could not be immediately known.
The sources were not authorized to speak to the media and declined to be identified. Reliance, whose interest in making semiconductors has not been previously disclosed, 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 declared that he wants his country to become a chip maker for the world, but those ambitions, first laid out in 2021, have suffered a setback. There are no chip manufacturing plants in the country yet, although India’s Vedanta and Taiwan’s Foxconn are both considering building facilities.
Sources said Reliance sees merit in getting into semiconductors as the move will help it avoid a chip shortage that could hit its telecom and electronic components businesses. For example, in 2021, the group delayed the launch of a low-cost smartphone it was developing with Google, citing chip shortages.
He said that the demand for semiconductors is also increasing in India and globally. The Indian government has estimated that the domestic chip market will be worth $80 billion (approximately Rs 6,64,200 crore) by 2028, compared to $23 billion (approximately Rs 1,90,960 crore) currently.
Arun Mampazhi, a former Indian executive at US-based chipmaker GlobalFoundries, said Reliance, which has a market capitalization of about $200 billion (roughly Rs. 16,60,530 crores), is one of the best-positioned companies in India to enter the semiconductor space. Will happen. ,
“They also have deep pockets and know how to work with the government,” he said.
But chip manufacturing is an industry that has historically been subject to boom and bust cycles and requires a lot of expertise.
“Getting a technology partner, either in the form of a joint venture, or through transfer of technology, is the breakthrough or breakthrough point for Reliance,” Mampazi said.
India’s chip ambitions have suffered a setback despite the government offering a $10 billion (roughly Rs. 83,030 crore) stimulus.
The $19.5 billion (roughly Rs. 1,61,930 crore) venture between Vedanta and Foxconn collapsed in July before it could get off the ground as both parties struggled to find a technology partner, with Foxconn complaining that the project was moving forward fast enough. Has not increased.
Foxconn has since decided to invest in India without Vedanta.
Plans by ISMC, a venture between Abu Dhabi-based Next Orbit Ventures and Israel’s Tower Semiconductor, to invest $3 billion (about Rs 24,900 crore) in India have moved slowly after Intel sought to acquire Tower . Negotiations between Intel and Tower later failed.
A third source with direct knowledge of the discussions said Reliance has been considering a $300 million (roughly Rs. 2,490 crore) investment for several months, which would give it a 30 percent stake in the venture.
Next Orbit Ventures and Tower did not respond to requests for comment.
© Thomson Reuters 2023
