On Monday, an MOU was signed between Vedanta Group and Hon Hai Technology Group (Foxconn) to form a joint venture company to design, package, and manufacture semiconductors in India.
Anil Agarwal’s Vedanta Group will hold the maximum stake in the JV, while Foxconn will have a minimum stake. Foxconn is the world’s largest contract electronics manufacturer and a major Apple supplier. The JV is signed to boost the electronic manufacturing sector in India. And Anil Agarwal will be Chairman of the JV company.
Under industry estimate, the semiconductor consumption in India was around Rs 1.1 lakh crore in 2020, and the total domestic demand for semiconductors fulfills through imports. Because in India, we don’t have any electronic chip manufacturing or commercial semiconductor fabs.
The government continues to move up the Indian electronics manufacturing sector. This first important announcement after the Indian government launched Rs 76,000 crore production-linked incentive (PLI) proposals for the electronics manufacturing sector.
The new project aims to create an all-inclusive ecosystem for semiconductor chip design, packaging, and manufacturing that can invite global Investment. The Investment of up to Rs 1.7 lakh crore is expected.
Vedanta group will invest up to Rs 60,000 crore to set up a glass and chip manufacturing ecosystem in India over the next three years to manufacture semiconductors in India. This pact of two companies will provide significant growth to India’s domestic electronics manufacturing.
According to Vedanta Group chairman, The location of the manufacturing setup is yet to finalize, and the planning is currently ongoing with a few State Governments, including Haryana, Gujarat, Maharashtra, Telangana, Tamil Nadu, and Karnataka, to set up the plant.
It is earlier confirmed that Akarsh Hebbar, MD, AvanStrate Inc– a subsidiary of Vedanta Group- plans to invest approximately $15 billion to manufacture display and semiconductor chips in India. And this Investment will be through the AvantStrate subsidiary of Vedanta Group.
Ashwini Vaishnav, The Union Minister for Electronics and Information Technology, assures full government support and fast-track clearances and approvals. It is expected that the project will likely open a new door to domestic manufacturing in India.
And for the project, the government will provide 50% fund for the project on an equal rights basis. The Indian government intends to encourage semiconductor companies like Intel and TSMC and display manufacturers to enhance the electronic manufacturing sector with the new projects.
United Microelectronics Corporation (UMC) and Taiwanese manufacturers Taiwan Semiconductor Manufacturing Company (TSMC) are reportedly opening up investments for chip manufacturing in India through a possible corporation.
The government efforts closely establish a manufacturing ecosystem with all necessary infrastructure such as land, high-quality power, semiconductor grade water, logistics, and research ecosystem to approve applications for setting up at least two greenfield semiconductor fabs and two display fabs in the country.
The JV of Vedanta, Foxconn, will increase domestic production of electronic goods. And manufacturing of semiconductors in India could help ease the global chip shortage that has a panic among automobile and electronics manufacturers.
Published By – Vanshu Mehra
Edited By – Subbuthai Padma
