With Foxconn, the Vedanta Group forms a joint venture to manufacture semiconductors in India

Anil Agarwal-led Vedanta group recently announced that it plans to invest approx USD 20 billion into the electronic chip and display manufacturing space in India.

Vedanta Group’s Global Managing Director of Display and Semiconductor Business Akarsh Hebbar told PTI on Friday that it expects to begin producing display units by 2024 and electronic chips from Indian facilities by 2025.

“Semiconductor is a long-term business. We are looking at about USD 10 billion on display. Right now we are looking at USD 7 billion in semiconductors that may also go up by another USD 3 billion to further extend it. First 10 years we have engaged to invest up to USD 15 billion. We will evaluate further investment at a later stage,” Hebbar said.

“Our aim is to do display by the end of 2024 and semiconductors by the end of 2025. We will focus on local demand but 25-30 percent may also go for export,” he said. Hebbar further said electronic components import in the country is about USD 100 billion, out of which semiconductors account for USD 25 billion.

After this proclamation Vedanta Pvt Ltd. became the first company to submit a proposal for seeking support from the federal government under its incentive plan. It is very important to mention here that the Indian government plans on investing ₹76,000 crores in semiconductor manufacturing units under its incentive program.

This program is expected to pave the way for India to become an electronics hub, especially at a time when the semiconductor shortage is affecting industries globally. Nearly every major country is currently affected by the worldwide chip shortage across a variety of industries, including smartphones, laptops, cars, and appliances. Due to this, there is no supply of units, the prices are high, and there is a shortage of products.

And India plans on converting this situation into an opportunity to boost the share of manufacturing in the economy and reverse a slowdown due to the COVID-19 pandemic. As a result of which Vedanta Pvt Ltd. and Hon Hai, known as Foxconn Technology Group worldwide announced that they signed a memorandum of understanding (MOU) to set up a joint venture to supply semiconductors in India and help bolster the country’s production of electronic goods.

In the future, the investment could reach USD 20 billion. The semiconductor business will be led by the Vedanta subsidiary Avanstrate. Mobile phone displays and electronic devices will be available from Indian plants by 2024, and electronic chips will be available by 2025.

“According to the MoU (memorandum of understanding) signed between the two companies, Vedanta will hold the majority equity in the JV, while Foxconn will be the minority shareholder,” the report said citing a statement by Vedanta.

Vedanta Chairman Anil Agarwal will be the chairman of the joint venture. “It will provide a significant boost to domestic manufacturing of electronics in India. Discussions are currently ongoing with a few state governments to finalize the location of the plant,” the statement said.