Reliance Industries explores chipmaking foray, talking with potential partners: Source

Billionaire Mukesh Ambani's Reliance Industries has begun exploring a foray into semiconductor manufacturing.

| Updated on: Sep 08 2023, 16:56 IST
Reliance Jio launches JioBharat V2 4G priced at just 999; it has internet too! Check out the photos
image caption
1/6 The new JioBharat V2 4G phone has emerged as the new phone for the masses. For less than Rs. 1000 it will even provide internet access. It is the phone with the lowest Net-enabled entry price. (ANI)
image caption
2/6 It will go under beta testing for the first 1 million Jio Bharat phones starting on July 7, ANI reported. (ANI)
image caption
3/6 The new JioBharat V2 4G smartphone comes with affordable internet services with basic recharge plans starting at Rs. 23 for 28 days, offering unlimited voice calls and 14 GB data, an ANI report added. (Jio)
Mukesh Ambani
4/6 Other operators typically offer a basic plan priced at Rs. 179 for 28 days with voice calls and 2GB of data. Jio claims that their basic plan is not only 30% cheaper but also provides 7 times more data compared to feature phone offerings from other operators. (Jio)
image caption
5/6 Additionally, Jio offers annual plans for the feature phone, costing Rs. 1234 for 12 months, which includes unlimited calls and 168 GB of data. (ANI)
image caption
6/6 Some other features of the new JioBharat phone include a 1.77-inch TFT display, 0.3MP camera, 1000mAh battery, SD card support up to 128GB, and 3.5mm headphone jack for audio. (Jio)
Mukesh Ambani
icon View all Images
Mukesh Ambani-led Reliance Industries, has held early-stage talks with foreign chipmakers that have the potential to become technology partners (REUTERS)

Billionaire Mukesh Ambani's Reliance Industries has begun exploring a foray into semiconductor manufacturing, a move that could address its supply chain needs and cater to growing chip demand in India, two people familiar with its strategy said.

The telecoms-to-energy conglomerate, encouraged by the Indian government, has held early-stage talks with foreign chipmakers that have the potential to become technology partners, said one of the people who has direct knowledge of the plans.

"There is intent, there is no timeline," said the person, adding that Reliance has "yet to make a call on whether they want to ultimately invest."

The names of the foreign chipmakers could not be immediately learned.

The sources were not authorised to speak to media and declined to be identified. Reliance, whose interest in making semiconductors 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 declared he wants his country to become a chipmaker for the world but those ambitions, first laid out in 2021, have suffered setbacks. The country does not as yet have any chip manufacturing plants, although India's Vedanta and Taiwan's Foxconn are both looking at building facilities.

Reliance sees merit in getting into semiconductors as the move would help safeguard against chip shortages that could affect its telecom and electronic devices businesses, the sources said. In 2021, for example, the conglomerate delayed the launch of a low-cost smartphone it was developing with Google citing the chip shortage.

Demand for semiconductors in India and globally is also increasing, they noted. India's government has forecast the domestic chip market will be worth $80 billion by 2028 compared with $23 billion currently.

Reliance, which has a market capitalisation of around $200 billion, would be one the best-positioned companies in India to delve into semiconductors, said Arun Mampazhy, a former India executive at U.S.-based chipmaker GlobalFoundries.

"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 beset with boom and bust cycles and requires much expertise.

"Getting a tech partner – as a joint venture, or via transfer of technology, is the make or break point" for Reliance, said Mampazhy.

Setbacks for India's chip ambitions have come despite the government's offer of $10 billion in incentives.

A $19.5 billion venture between Vedanta and Foxconn collapsed in July even before it got off the ground as the two sides struggled to find a tech partner, with Foxconn complaining that the project had not moved fast enough.

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 in India, have moved slowly after Intel sought to acquire Tower. Talks between Intel and Tower later collapsed.

Reliance has for months been considering an investment of $300 million that would give it a 30% stake in the venture, a third source with direct knowledge of discussions said.

Next Orbit Ventures and Tower did not respond to requests for comment.

Follow HT Tech for the latest tech news and reviews , also keep up with us on Whatsapp channel,Twitter, Facebook, Google News, and Instagram. For our latest videos, subscribe to our YouTube channel.

First Published Date: 08 Sep, 16:56 IST