Reliance Set To Break Ground In Chip Manufacturing Amidst Rising Demand: Report

Mukesh Ambani’s Reliance Industries is reportedly eyeing the semiconductor manufacturing sector to bolster its supply chain and tap into surging chip demand. The conglomerate, with a nudge from the Indian government, has initiated preliminary discussions with international chipmakers for potential tech collaborations, sources intimate with the matter told Reuters.

What to know? While the intent is clear, the timeline and final investment decisions remain fluid. The identity of these foreign chipmakers remains under wraps.

This new venture by Reliance, a titan with a market cap nearing $200 billion (₹16.6 lakh crore), comes as India grapples with the absence of chip manufacturing units, despite ambitious plans announced in 2021.

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Why semiconductors? Reliance’s interest in semiconductors isn’t just a whim. The 2021 chip shortage, which delayed its low-cost smartphone project with Google, underscores the importance of this move. With the Indian government projecting the domestic chip market to soar from $23 billion (₹1.9 lakh crore) to $80 billion (₹6.63 lakh crore) by 2028, the stakes are high.

Arun Mampazhy, a former executive at GlobalFoundries, believes Reliance’s deep pockets and governmental rapport make them a formidable contender in the semiconductor arena. However, he emphasised the pivotal role of a tech partner in this venture.

Despite a whopping $10 billion (₹82,956 crore) incentive from the government, India’s chip dreams have faced hurdles. Notably, a joint venture between Vedanta and Foxconn fizzled out due to tech partner complications. Reliance’s potential $300 million (₹2,488 crore) investment for a 30% stake in a venture between Next Orbit Ventures and Tower Semiconductor is also on the industry’s radar.

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