Mukesh Ambani-led oil-to-telecom conglomerate Reliance Industries is eyeing to acquire Israel-based Tower Semiconductor, sources close to the development told Business Today. However, the plans might get delayed due to the ongoing Israel-Hamas conflict. The company spokesperson, however denied the development, stating, “we are not in talks to acquire Tower Semiconductor. There is no truth in this.”
Acquiring Israel-based Tower Semiconductor is likely to help Reliance foray into the chip ecosystem. Last year, Reliance was rumoured to be interested in purchasing a stake in semiconductor wafer fab applicant International Semiconductor Consortium (ISMC), but there was no further development.
This new development comes after Intel recently called off its acquisition of Tower Semiconductor. In February 2022, Intel announced plans to acquire Tower Semiconductor for $5.4 billion. But in August 2023, Intel had to scrap the acquisition after regulators did not approve the deal. This has presented Reliance an opportunity to acquire Tower Semiconductor or some stake in the company, say experts.
Tower Semiconductor is a leading foundry of high-value analog semiconductor solutions. It specialises in manufacturing analog integrated circuits for more than 300 customers worldwide in sectors such as automotive, medical, industrial, consumer, aerospace, and defence, among others. It was ranked seventh in global foundry revenue with $356 million as per TrendForce Q1-Q3 data, and its annual revenue is likely to be well over $1 billion.
Tower Semiconductor has repeatedly offered to help India build its semiconductor ecosystem. In 2013-14, it was part of a consortium led by Jaypee Group, where it would have been a technology partner along with IBM. The company once again offered to be a technology partner, this time with ISMC, which had submitted an application under India’s Rs 76,000 crore semiconductor incentive scheme in February 2022 for a 65nm technology node analog fab.
Just recently, Rajeev Chandrasekhar, Union Minister of State, Ministry of Electronics & IT, had a meeting with Russell C. Ellwanger, CEO, Tower Semiconductors, in India, where the two discussed about India-Tower partnership in the semiconductor space. This meeting was also joined by Naor Gilon, Israel’s Ambassador to India.
Reliance’s reported interest in Tower Semiconductor isn’t surprising as some major business houses in India, including Tata, Vedanta and Hiranandani group, are actively looking at entering chip manufacturing. Both Tata and Vedanta have onboarded semiconductor veterans to help lead their new ventures. The move to enter chipmaking can possibly even help Reliance future-proof its telecom and electronics business.