Reliance in talks with potential partners for chipmaking foray: report

Oil-to-retail conglomerate Reliance Industries Ltd (RIL) is reported to be in talks with global leaders in semiconductor business in a bid to explore a possible entry into the high technology business of chip making, say reports citing reliable sources.

Encouraged by government policies, the Mukesh Ambani-led group has been looking for ways to manufacture semiconductors in India so as to cater to the growing demand in the country and to address the issue of supply chain bottlenecks.

In fact, RIL had, earlier, held preliminary talks with foreign chipmakers for a potential joint venture, say reports citing sources with direct knowledge of the developments. 

"There is intent, there is no timeline," the report cited the source as saying, adding that Reliance has "yet to make a call on whether they want to ultimately invest."

However, the names of the foreign chipmakers are yet to be revealed.

Reliance has not so far reported any plans to enter semiconductor manufacturing and there seems to be no urge on the company’s part to enter the business which is not core to its current businesses.

Prime Minister Narendra Modi and the ministry of electronics and information technology have been pushing for the country’s grand entry into chip making business.

An earlier plan by natural resources giant Vedanta to partner Taiwan's Foxconn to build a semiconductor plant in Gujarat fizzled out as the Taiwanese company backed out of the joint venture deal.

Reliance may still be interested in entering semiconductor manufacturing business as it would help safeguard its telecom and electronic devices business against chip shortages, the report quoted the source as saying.

Demand for semiconductors in India is increasing exponentially with increasing use of electronic devices and Reliance too could feel the pinch as it is collaborating with Google for manufacturing a low-cost smartphone for its 5G network expansion.

Also, with a capital base of $200 billion, RIL is best positioned in India to enter the semiconductor business, according to Arun Mampazhy, a former India executive at US-based chipmaker GlobalFoundries.

India’s semiconductor ambitions have suffered setbacks despite the government’s offer of $10 billion in incentives, mainly because of narrow business concerns and vested interests.