The sources declined to give their names since they were not authorized to speak to the media. Reliance did not reply to multiple requests for comment despite having an unreported interest in producing semiconductors.
Reliance Industries, owned by billionaire Mukesh Ambani, has started exploring a push into semiconductor production, a move that might handle its supply chain requirements and meet the rising chip demand in India, according to two people familiar with its strategy.
According to one of the sources with direct knowledge of the plans, the telecoms-to-energy conglomerate has had preliminary discussions with foreign chipmakers who may end up as technical partners, with the support of the Indian government.
The insider added that Reliance has “yet to make a decision on whether they want to ultimately invest,” adding that “there is intent, there is no timeline.”
It was impossible to discover the names of the foreign chipmakers right away.
The sources declined to give their names since they were not authorized to speak to the media. Reliance did not reply to multiple requests for comment despite having an unreported interest in producing semiconductors.
Requests for feedback from the Prime Minister Narendra Modi’s office and the Indian IT ministry went unanswered as well.
Although Modi has stated that he wants his nation to produce chips for the entire globe, his plans, originally stated in 2021, have encountered obstacles. Although Indian company Vedanta and Taiwanese company Foxconn are both considering establishing facilities, the nation does not currently have any chip manufacturing factories.
According to the sources, Reliance sees the value in investing in semiconductors as a way to protect against chip shortages that would negatively impact its telecom and electronic device businesses. For example, the conglomerate postponed the release of a low-cost smartphone it was working on with Google in 2021, claiming a chip shortage.
They noticed there is a rising demand for semiconductors both domestically and internationally. The domestic chip market in India is expected to grow from its present $23 billion value to $80 billion by 2028, according to official estimates.
According to Arun Mampazhy, a former India executive at American chipmaker GlobalFoundries, Reliance, which has a market capitalization of over $200 billion, would be one of the best-positioned Indian corporations to enter the semiconductor sector.
He added, “They also know how to work with the government and have huge funds.
However, the chip manufacturing sector has a long history of boom and bust cycles and demands a high level of competence.
The key to Reliance’s success, according to Mampazhy, is finding a technological partner through a joint venture or a transfer of technology.
Despite the government’s pledge of $10 billion in incentives, obstacles have arisen for India’s objectives in the semiconductor industry.
Vedanta and Foxconn’s $19.5 billion joint venture fell apart in July before it even got off the ground as the two parties struggled to locate a tech partner. Foxconn complained that the project had not proceeded quickly enough.
Since then, Foxconn has chosen to make investments in India without Vedanta.
Following Intel’s attempt to acquire Tower Semiconductor, plans by ISMC, a partnership between Abu Dhabi’s Next Orbit Ventures and Israel’s Tower Semiconductor, to invest $3 billion in India have made poor progress. Later, negotiations between Intel and Tower broke down.
A third person with direct knowledge of the conversations claimed that Reliance has been considering a $300 million investment that would give it a 30% stake in the project for months.
Requests for response from Next Orbit Ventures and Tower went unanswered.
Topics #Ambani #Chip #Foxconn #Jio #Mukesh Ambani #Reliance #semiconductor #Vednata
