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Reliance Industries plans LCD and chip investments

Reliance Industries Ltd, India’s biggest oil refiner, plans to lead 650 billion rupees (US$16 billion) in investments in chip and liquid-crystal display (LCD) factories as the country tries to build a manufacturing sector.

Reliance, based in Mumbai, is seeking approval to spend 302 billion rupees on facilities to make semiconductors and chip-wafers, according to an e-mailed statement from the government’s press information bureau yesterday. Videocon Industries Ltd may spend 80 billion rupees on setting up an LCD manufacturing site.

India, which failed to win Intel Corp’s first Asian chip-making plant, is offering tax breaks and subsidies to create manufacturing jobs as growth falters in Asia’s third-largest economy. Reliance and Videocon will compete with chip and display companies in China, Taiwan and South Korea.

Reliance, controlled by billionaire Mukesh Ambani, intends to spend 185.2 billion rupees on a chip plant over 10 years and 116.3 billion rupees on a factory to make solar cell modules, the statement said.

“The group is currently evaluating an investment in an integrated semiconductor facility,” Tushar Pania, a spokesman for Reliance in Mumbai, said by telephone yesterday. “The group will make necessary announcements when plans are final.”

Reliance’s factory to make solar cells capable of producing 1 gigawatt of electricity from silicon wafers will be located in Jamnagar, where the company is building what is set to be the world’s biggest refining complex. The factory would create 11,000 jobs, the government’s statement said.

The company’s chip-manufacturing site may be located in Navi Mumbai, Hyderabad, Mysore or Haryana, and may employ 4,000 people, the government said.

“Such industries are highly capital intensive and have to deal with constantly changing technology,” the government statement said. “It therefore became imperative on the part of the government to create a conducive environment for manufacturing and offer a package of incentives comparable with other countries.”

The six companies making the proposed investments listed in the government’s statement included Moser Baer India Ltd, India’s largest maker of compact discs, as well as Titan Energy System Ltd, Signet Solar Inc and KSK Energy Ventures Pvt.

Videocon Industries, India’s largest consumer electronics maker, plans to spend 80 billion rupees on setting up the LCD manufacturing site in Navi Mumbai. Its stock fell 1.8 percent to 315.60 rupees.
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