Indian multinational mining company Vedanta announced that it has signed two MoUs with the government of Indian state of Gujarat, for setting up country’s first ever semiconductor plants. As part of the MoUs, the mining giant will set up a semiconductor fab unit, a display fab unit and a semiconductor assembling and testing unit in the Ahmedabad district.
The agreements will witness a total investment of ₹1.54 lakh crores – the largest-ever by any group in an Indian state in India – into setting up and establishing the semi-conductor facility. Vedanta said that the entire project, which would “will attract electronics ecosystem players across the value chain” and “put the state of Gujarat on the global silicon map,” provide employment to around one lakh individuals.
Out of this, ₹94,500 crores will be deployed towards setting up of the display fabrication manufacturing unit. The remaining ₹60,000 crores will be invested in the state itself to manufacture a semiconductor fabrication and outsourced semiconductor assembly and test (OSAT) unit.
This development is the first fruit borne of Vedanta’s $20 billion joint venture with Taiwanese silicon major Foxconn. It also makes Vedanta the third company – after international semiconductor consortium ISMC and Singapore’s IGSS Ventures – to announce a chip plant location in India.
“History gets made! Happy to announce that the new Vedanta-Foxconn semiconductor plant will be set up in #Gujarat. Vedanta’s landmark investment of ₹1.54 lakh crores will help make India’s #Atmanirbhar Silicon Valley a reality,” wrote Anil Agarwal, founder and chairman of Vedanta Resources, in a tweet.
“India’s own Silicon Valley is a step closer now. #India will fulfil the digital needs of not just her people, but also those from across the seas. The journey from being a Chip Taker to a Chip Maker has officially begun…Jai Hind!” Agarwal wrote in another tweet.
This development is, of course, a major breakthrough in the journey of reducing dependency on imports and making India self-sufficient when it comes to semiconductors and manufacturing them, something that is crucial given that the homegrown semiconductor market is expected to grow at a CAGR of nearly 19% to reach $64 billion in 2026. Additionally, it is in line with Atmanirbhar Bharat, which is the vision of PM Narendra Modi to make India a self-reliant nation.
The proposed semiconductor manufacturing fab unit will operate on the 28nm
technology nodes and the display manufacturing unit will produce Generation 8
displays catering to small, medium and large applications. Vedanta will hold 60% of the equity in the JV while Foxconn will own 40%. The JV will look at setting
up a semiconductor manufacturing plant in the next two years.
As for Gujarat’s role in this venture, Gujarat CM Bhupendrabhai Patel said that the state was prepared to extend any support to the project. Vijay Nehra, Secretary, Gujarat Science and Technology Department, added that the state government would also extend fiscal and non-fiscal incentives and benefits as outlined under the Gujarat Semiconductor Policy-2022. Incentives would also be provided by the Centre under its India Semiconductor Mission
“I congratulate Vedanta and Foxconn for taking this initiative and bringing the semiconductor plant to India. The Gujarat plant will go a long way in helping build $1 trillion digital national economy,” said Ashwini Vaishnav, Union Minister for Electronics and Information Technology.