Mukesh Ambani-led Reliance Industries Looking To Tap Semiconductor Market, In Talks With Potential Investors: Report

Billionaire Mukesh Ambani’s Reliance Industries is reportedly exploring a foray in semiconductor manufacturing, which could cater to the growing chip demand in India, two people familiar with the matter were quoted as saying by Reuters.

Another source revealed that the conglomerate has held early stage talks with foreign chipmakers that have the potential to become technology partners. "There is intent, there is no timeline. Reliance is yet to make a call on whether they want to ultimately invest,” source said.

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Reliance is witnessing the potential benefits of entering the semiconductor industry, as it could serve as a strategic move to mitigate the risks associated with chip shortages that could impact its telecommunications and electronic device ventures, according to insider sources as quoted by Reuters.

Infact, the conglomerate delayed the launch of a low-cost smartphone it was developing with Google due to chip shortage.

Demand for semiconductors is rising day by day in India and globally. The Indian government has forecasted that the domestic chip market will be worth $80 billion by 2028 compared with $23 billion currently.

“Reliance would be one the best-positioned companies in India to delve into semiconductors,” said Arun Mampazhy, a former India executive at the U.S.-based chipmaker GlobalFoundries, adding that the conglomerate also has deep pockets and knows how to work with the government.

India’s semiconductor industry has been facing a setback even when the government is offering $10 billion in incentives. In July, joint venture of Vedanta and Foxconn collapsed as it struggled to find a tech partner.

ISMC, a joint venture between Next Orbit Ventures in Abu Dhabi and Israel's Tower Semiconductor (TSEM.TA), initially had ambitious plans to invest $3 billion in India. However, progress on these plans hit a snag when Intel (INTC.O) expressed interest in acquiring Tower Semiconductor. Subsequently, discussions between Intel and Tower Semiconductor fell apart, causing delays in ISMC's investment plans for India.

Reliance has for months been considering an investment of $300 million that would give it a 30% stake in the venture, a third source was quoted as saying by Reuters.