Reliance looks abroad for semiconductor unit

Keeps options open for setting up Rs 30,000 cr project in India

BANGALORE: Mukesh Ambani’s Reliance Industries (RIL) is understood to be evaluating at least four overseas locations for setting up two plants for semiconductor fabrication and manufacturing solar grade wafers and polysilicon.

The company had earlier proposed to set up the plants in India at a cost of Rs 30,000 crore and had accordingly made a proposal to the government.

The company has appointed international consultant PricewaterhouseCoopers to carry out a location study for the project, according to sources familiar with the development.
Semiconductor fabrication is the process used to create chips, the integrated circuits that are present in everyday electrical and electronic devices. 

It is a multiple-step sequence of photographic and chemical processing steps during which electronic circuits are gradually created on a wafer made of pure semiconducting material.

Asked to confirm the development, a senior Reliance Industries official, who did not wished to be named, said the company was keeping its options open on locating the ambitious project either in India or abroad.

The company has been awaiting a much-delayed decision on its proposal by the Union government. “We have been approached by several state governments, but we require more infrastructural support than these states can provide and, therefore, have not ruled out a foreign location for setting up the projects,” he said without confirming the appointment of PwC.

He also refused to elaborate which overseas locations were being studied, but added taking a decision on setting up the project was problem given the fluctuating dollar value.

Much attention is riveted on the RIL proposal since the Union Communications minister A Raja confirmed it in April this year. The government notified the National Semiconductor Policy in March 2007, which includes an incentive regime for semiconductor manufacturing and eco-system units including solar photovoltaic units.

According to industry sources, the latest tally of proposals received by the Centre since the policy was announced total up to an investment of Rs 1,15,000 crore. However, among all the proposals only Reliance Industries’ application includes an application to set up a semiconductor chip fabrication unit, they said.

Of the two other players in the running to set up such fabs, SemIndia has dropped out of the race content with setting up just an assembly, test, marking and packaging (ATMP) unit in Hyderabad’s FabCity while the other, the Hindustan Semiconductor Manufacturing Corp, has been silent on its plans for the past several months.

Apart from the electronics chip unit, RIL is serious about setting up a larger-scale solar PV fabrication unit. “We will not set up anything below the capacity of 1 gigawatt which will cost $5 billion to set up and take three years to commission,” the RIL official said.
This project was expected to come up in Jamnagar in Gujarat to make ploysilicon, single crystalline and multi-crystalline ingots, solar wafers, SPV modules etc.

RIL had sought a subsidy of Rs 3,394.56 crore from the government for its first semiconductor plant and Rs 2,326.20 crore for the second one. The two plants were expected to generate 15,000 skilled and unskilled jobs, according to the Department of Information Technology.

In the meantime, RIL has set up a 30 megawatt (mw) solar photovoltaic unit in Navi Mumbai as a pilot project and will be investing Rs 110 crore to set up a 5 mw grid interactive solar power generation project in Rajasthan.

The project is being undertaken under the Union ministry of new and renewable energy’s demonstration programme to support up to 50 mw of grid interactive solar power generation in the country.

p_chitti@dnaindia.net