India’s oil-to-metals conglomerate Vedanta on Tuesday said the company and electronics manufacturing giant Foxconn will together set up a semiconductor and display FAB manufacturing unit in Gujarat. Both companies will invest Rs 1,54,000 crore for establishing the facility in the state. Vedanta and Foxconn on Tuesday also signed a memorandum of understanding with the Gujarat government to set up the unit in the state. The MoU was signed in the presence of Minister for Railways, Communications, Electronics & Information Technology, Ashwini Vaishnaw, at a function held in Gandhinagar.
The ₹ 1.54 lakh crore investment by Vedanta and Foxconn will be used to set up India's first semiconductor production plant, a display fab unit, and a semiconductor assembling and testing unit. The plants will be set up on a 1000-acre land in Ahmedabad. "The plant will start production in two years," Vedanta chairman Anil Agarwal told PTI after signing the memorandum of understanding (MoU) with the Gujarat government.
Foxconn is acting as the technical partner, while oil-to-metals conglomerate Vedanta is financing the project.
Vedanta and Foxconn will work closely with the state government to establish high-tech clusters with requisite infrastructure, including land, semiconductor-grade water, and power, the companies said in a joint statement.
The companies also said the project will create more than 100,000 jobs in Gujarat. Semiconductor chips, or microchips, are essential pieces of many digital consumer products - from cars to mobile phones and ATM cards. The Indian semiconductor market was valued at $27.2 billion in 2021 and is expected to grow at a healthy CAGR of nearly 19 per cent to reach $64 billion in 2026. But none of these chips is manufactured in India so far. Vedanta is the third company to announce a chip plant location in India after international consortium ISMC and Singapore-based IGSS Ventures, which are setting up in Karnataka and Tamil Nadu respectively.
To cut dependence on imports from nations like Taiwan and China, the government brought a fiscal incentive scheme for manufacturing semiconductors in the country. Vedanta-Foxconn is one of the successful applicants for the Production Linked Incentive (PLI) scheme for semiconductors.
India’s semiconductor market is estimated to reach $63 billion by 2026 from $15 billion in 2020. Most of the world’s chip output is limited to a few countries like Taiwan and late entrant India is now actively luring companies to “usher in a new era in electronics manufacturing” as it seeks ways to have seamless access to chips. It decided in February to diversify into chip manufacturing and formed a joint venture with Foxconn.
By Abhimanyu Kulkarni, source https://www.news18.com/news/business/vedanta-foxconn-to-set-up-semiconductor-manufacturing-plant-in-gujarat-mou-signed-know-details-5947057.html