Amid the increasing global demand for semiconductors and an escalating trade war between the US and China, India’s conglomerate giant, Reliance Industries Ltd. is said to be exploring possibilities to foray into chip manufacturing. Reports suggest that the company has been in preliminary talks with potential partners based in Germany.
Reliance Industries Ltd., the conglomerate spearheaded by Asia’s richest man, Mukesh Ambani, has a wide range of businesses under its banner, including petrochemicals, telecommunication, retail, and digital services. However, venturing into the semiconductor arena would mark a significant expansion of the company’s portfolio and represents its ambition to position itself as a global tech leader.
The global chip shortage, accelerated by flourishing technologies such as 5G, AI, and IoT, is driving global tech companies to pursue self-sufficiency in chip supply. Furthermore, China’s aggressive moves towards developing its semiconductor industry amid geo-political tensions and trade restrictions with the US also augment the need for semiconductor self-reliance.
Venturing into the chip industry will not only diversify Reliance’s revenue streams but also complement its existing digital and telecom services, including its telecom service Jio, which is on the path of transitioning to 5G technology. Having a chip manufacturing capability will give the company a tighter control over quality, cost, and supply chain, making it less dependent on global suppliers.
Notably, the company’s interest in chip manufacturing comes on the heels of Indian Prime Minister Narendra Modi’s prominent push for Atmanirbhar Bharat (self-reliant India) which encourages domestic companies to reduce import dependence and boost local manufacturing.
The details about the potential partnership in Germany remain closely held. However, the choice of Germany as a partner significantly makes sense. Besides being one of the largest economies in Europe, Germany boasts a strong semiconductor industry with the presence of leading players like Infineon Technologies and global chip manufacturing giant, GlobalFoundries’ facility in Dresden.
Entering the highly capital-intensive and technically complex semiconductor industry would be a challenge for any newcomer. Despite the risks, Reliance’s potential entry could significantly accelerate India’s ambitions in the semiconductor space, fulfilling the increasing domestic demand, reducing import reliance, and enhancing the country’s tech capabilities on the global stage.
While Reliance has not provided any official confirmation about these reports yet, this potential foray into chip manufacturing could mark a significant milestone in the company’s growth trajectory and India’s tech capabilities. This move will increase the global footprint of Reliance, setting a remarkable precedent for other Indian tech behemoths to follow.
Considering India’s technological ambitions and the escalating global demand for semiconductors, Reliance Industries’ speculated entry into the world of chip manufacturing could turn out to be a strategic and timely move.