Not a member yet?
|
vipinlara's review
Investment Sector: Emerging Markets Submitted by Vipinlara 
3 months ago Add Tag |
Over the last 30 years, Reliance Industries has dreamt big, often putting gigantic sums into executing mammoth projects, always within punishing schedules. Now, it is showing that same derring-do in the chip-making business. And this time, it has also become slightly bolder. In India, Reliance is venturing where no other manufacturer, including global biggies like Intel, Advanced Micro Devices (AMD), Texas Instruments, Freescale and STMicroelectronics, were willing to tread—into semi-conductor fabrication.
For one, this is a hugely capital-intensive industry that is both a power and water-guzzler, where even established biggies have pulled out citing inadequate infrastructure. Plus, inordinate delays in transporting these wafers to export markets, caused chiefly due to the delayed turnaround times at Indian ports, has also traditionally turned away semi-conductor makers. Therefore, what Reliance was doing was unprecedented.With well-established semi-conductor manufacturers in India’s neighbourhood, including in China, Taiwan and Singapore, which have traditionally supported fabrication units with a plethora of incentives, global heavyweights like Intel and AMD have thought it fit to set up shop there, rather than butt heads with India’s patchy infrastructure.
Also, the high-tech chip-making and solar cell businesses are unchartered territory for Reliance, although it has shown scale, leverage and backward integration in the polymers to petrochemicals business, and muscled its way into the oil, telecom and retail businesses. In effect, making 70,000 wafers a month, 10 million chip packages a week and one giga watt of solar cell modules, with one fabrication unit costing anywhere from $3-5 billion, looks like Reliance’s most risky gamble. Small countries like Israel, Vietnam, Taiwan and Singapore export more chips than what they consume. For Reliance too, exports is where the real money will come from. . The good news for Reliance is that domestic manufacturing in sectors such as telecom, information technology, office automation, consumer durables, industrial equipment and automotive is showing signs of picking up. The increasing use of electronics and chips in their product portfolios will help increase the potential of the market.Did you find this article useful?
3 comments ↓
WEB CONSULTANT / PASTOR at LIGHT OF THE WORLD CHRISTIAN CENTER
WEB CONSULTANT / PASTOR at LIGHT OF THE WORLD CHRISTIAN CENTER
WEB CONSULTANT / PASTOR at LIGHT OF THE WORLD CHRISTIAN CENTER