Reliance Strategic Business Ventures Limited (RSBVL), a subsidiary of Reliance Industries Limited (RIL) has announced a joint venture with Sanmina Corporation to set up an electronic manufacturing hub in India.
The manufacturing hub will initially operate from Sanmina’s existing 100-acre campus in Chennai and will be expanded to new sites across India depending on the business requirements, RIL said.
The new hub will also include a manufacturing technology center of excellence that will promote research and serve as an incubation center for the hardware startup ecosystem.
As part of the joint venture, Reliance has made an investment of Rs 1,670 crore in new shares in Sanmina SCI India Private Ltd (SIPL).
The investment gives RSBVL 50.1% equity stake in the joint venture, while the remaining 49.9% stake will be with Sanmina. According to RIL, the joint venture will be capitalized with over $200 million of cash to fund growth.
The transaction is pending regulatory approvals and is expected to close by September 2022.
The daily operations at the new manufacturing hub will be managed by Sanmina’s current management team in Chennai.
The joint venture will enable Sanmina to expand its manufacturing capacity and fulfill Indian and global requirements of hi-tech electronics.
The hub will focus on manufacturing of electronics for various sectors including communications and networking (5G, cloud infrastructure, hyperscale data centers), medical and healthcare systems, industrial and cleantech, and defense and aerospace.
Akash Ambani, Director, Reliance Jio points out, "for both growth and security, it is essential for India to be more self-reliant in electronics manufacturing in telecom, IT, data centers, cloud and 5G.
"Through this partnership we plan to boost innovation and talent in India, meeting both Indian and global demand,” he added.
“This joint venture will service both domestic and export markets and represents a major milestone in the Indian government's Make in India initiative," Jure Sola, Chairman and Chief Executive Officer, Sanmina said in a statement.
According to MeitY, electronics manufacturing in India is expected to see 30% growth in the next fiscal to reach nearly Rs 7 lakh crore in value on the back of the Rs 2.3 lakh crore push from various production linked incentive schemes.
Reliance Jio claims its 5G network is based on indigenous technologies. Last year, the company also launched an entry level smartphone in partnership with Google. As per Canalys, 2 million units of the Jio Phone Next were shipped in the first two months of the launch.