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Reliance Industries explores entry into semiconductor manufacturing


Mumbai: Reliance Industries, led by billionaire Mukesh Ambani, is reportedly considering entering the semiconductor manufacturing industry.

The conglomerate has initiated preliminary discussions with potential foreign chipmaking partners, reported Reuters. "There is intent, there is no timeline. Reliance has"yet to make a call on whether they want to ultimately invest," said the source.

While no formal decision has been made, the move aligns with the Indian government's aspirations for the nation to become a prominent chipmaker. These ambitions, first articulated in 2021, have faced challenges, as India currently lacks semiconductor manufacturing plants. However, companies like Vedanta and Foxconn are exploring the construction of such facilities in India.

Reliance is interested in semiconductor manufacturing to secure its supply chain against potential chip shortages, which could impact its telecommunications and electronic devices businesses. In 2021, the company delayed the launch of a low-cost smartphone developed in collaboration with Google due to chip shortages.

The demand for semiconductors in India and globally is on the rise, with India's government projecting the domestic chip market to reach $80 billion by 2028, compared to the current $23 billion.

With a market capitalisation of approximately $200 billion, Reliance is well-positioned to venture into the semiconductor industry.

Arun Mampazhy, a former India executive at GlobalFoundries, noted that the company has significant resources and experience working with the government. However, he also emphasised the importance of securing a tech partner through a joint venture or technology transfer.

Despite the Indian government's $10 billion incentives offer, the country has experienced setbacks in its chip manufacturing ambitions. The $19.5 billion Vedanta-Foxconn joint venture fell apart, and ISMC's plans to invest $3 billion in India slowed after Intel's attempt to acquire Tower Semiconductor.

Reliance has been contemplating a $300 million investment for a 30% stake in the venture for several months, according to sources.

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TAGS:Reliance Industriessemiconductor industry in Indiasemiconductor manufacturing
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