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Vedanta will finalize a location for its $20 billion semiconductor and display plants in India by next month and expects to roll out the first chip product in two years, its chairman Anil Agarwal said. The oil-to-metals conglomerate is in talks with several Indian states on the unit's location. Vedanta has a total planned investment outlay of $20 billion for two separate units for chip and display manufacturing.

"You have to create another Taiwan in India," Agarwal told Reuters on the sidelines of the annual World Economic Forum, noting that India will have to focus on bringing the entire semiconductor ecosystem locally for it to be a global powerhouse.

"Foxconn is our technical partner. We may not take equity partner for the fab," Agarwal told Reuters, adding that the Taiwan-based Foxconn will have technical responsibility for the operation, from providing the tech to making semiconductors.

Vedanta's chairman also said that private equity wants to be part of India's semiconductor expansion and there was no shortage of funds. 

The first phase of Vedanta's project will entail an investment of $2 billion.

Speaking on the opportunity for manufacturing semiconductors in India, Agarwal told Mint earlier this month that “India needs to import $15 billion worth of semiconductors. It’s because of the shortage of semiconductor that we haven’t been able to run our factories at 100%. We are manufacturing glass and optical fibre. So, it was natural for us to move into semiconductors."

In December, the Indian government had approved a $10 billion incentive plan to attract semiconductor and display manufacturers, as part of a deepening push to establish the country as a global electronics production hub. Under the plan, India's government will extend fiscal support of up to 50% of a project's cost to eligible display and semiconductor fabricators.

The Indian government has said it will expand incentives beyond an initial $10-billion plan for those investing in semiconductor manufacturing, as it aims to become a key player in the global supply chain for chips.

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