Reliance and HCL Technologies evaluating independent plans to pick up 30% stake in ISMC analog for $500-600 Mn.

Last December, India had approved a $10-billion incentive plan to attract semiconductor and display manufacturers deepening the push to establish the country as a global electronics production hub.

Reliance Industries Limited (RIL) and HCL Technologies are independently “evaluating” deals to pick up 30 percent equity stake each in semiconductor wafer fab applicant ISMC Analog, according to media reports. The development hints at heightened interest in India’s ambitious move to seed a semiconductor manufacturing ecosystem in the country.

It is likely that both RIL and HCL will invest through subsidiaries with an estimated total investment from both parties likely to exceed Rs 4,000 crore ($500-600 million). The terms for both proposed agreements have been signed recently, the report added.

Last December, India had approved a $10-billion incentive plan to attract semiconductor and display manufacturers deepening the push to establish the country as a global electronics production hub. Under the Semicon scheme, the Centre announced to make upfront investments – 50 percent tax support under recent amendments – to support semiconductor wafer factory proposals submitted by various corporate entities.

If the deals are successful, RIL and HCL will join Vedanta in the semiconductor manufacturing fray in India, which is considered a strategic initiative for the country. The government is likely to start approving proposals to set up an electronic chip and display manufacturing plant in the country in the next 30-60 days, Minister of State for Electronics and IT Rajeev Chandrasekhar said recently.

Vedanta Foxconn JV, IGSS Ventures, and ISMC have proposed to set up electronic chip manufacturing plants with a $13.6 billion investment and have sought the support of $5.6 billion from the Centre under the Rs 76,000 crore Semicon India Programme.

Vedanta-Foxconn joint venture for its $20 billion semiconductor and display panel fabrication facilities in Gujarat is gaining momentum. Foxconn president Young Liu is expected to make his second visit to meet Prime Minister Narendra Modi in late November.