PM hails Vedanta-Foxconn pact to set up Rs 1.54 lakh crore chip making plant in Gujarat

Prime Minister Narendra Modi on Tuesday lauded the signing of a Rs 1.54 lakh crore agreement between the Vedanta-Foxconn joint venture and Gujarat government for setting up a semiconductor and display fabrication manufacturing unit in the state.

“This MoU is an important step for accelerating India’s semi-conductor manufacturing ambitions. The investment of Rs 1.54 lakh crore will create a significant impact to boost the economy and jobs. This will also create a huge ecosystem for ancillary industries and help our MSMEs,” the Prime Minister tweeted.

Taiwan’s tech giant Foxconn is acting as the technical partner, while Vedanta is financing the project as it looks to diversify into chip manufacturing.

According to the MoU, while Vedanta Displays will set up a display fabrication unit with an investment of Rs 94,500 crore, Vedanta semiconductors will set up an integrated semiconductor fab unit and outsourced semiconductor assembly and test (OSAT) facility for Rs 60,000 crore. Thus, the two MoUs together will bring investment of more than Rs 1.54 lakh crore.

Gujarat Chief Minister Bhupendrabhai Patel said the venture would create more than 100,000 jobs, and the state was prepared to extend any support to the project, which it won in a close race with India’s richest state, Maharashtra.

Speaking on the sidelines of the event Vedanta Group Chairman Anil Agarwal told media persons that the first phase of the project will see an investment of $10 billion over 2-3 years, and the joint venture aims to break-even in 4-5 years.

The Narendra Modi government has said it will expand incentives beyond an initial $10 billion plan for those investing in semiconductor manufacturing, as part of the big push to become a key player in the global supply chain for chips.

Among the concessions being offered by the state government is a 25 per cent capital subsidy and power at subsidised tariff of Rs 3 per unit, Agarwal said, while adding that the group would be largely using renewable energy.

The proposed semiconductor manufacturing fab unit will operate on the 28 nanometre technology nodes with wafer size 300 mm; and the display manufacturing unit will produce generation 8 displays catering to small, medium, and large applications.

Vedanta Semiconductors’ Managing Director Akarsh Hebbar said semiconductors of 28 nm and 12 inch wafer will be the key technology product, given the global demand globally, especially across key industries such as smartphones, ICT devices, TV, notebooks, and electric vehicles (EVs).