Home / Companies / News /  Vedanta eyes 2nd semiconductor unit after $20bn facility in Gujarat

NEW DELHI : Vedanta Resources Ltd chairman Anil Agarwal on Tuesday said his company is considering a second chip and display manufacturing facility in India, even as it announced a $20-billion ( 1.54 trillion) investment plan for its first such venture in Gujarat. Agarwal said India would need at least two such factories to become a hub of chip manufacturing and meet the needs of the country and the world.

“There are some interesting proposals from Andhra Pradesh and Maharashtra, and we will look for our second plant after starting operations from the first unit in Gujarat," Agarwal said over the phone. The Gujarat facility may complete ground-breaking by the year-end, and production is expected to start by 2024, Agarwal said.

Vedanta’s Gujarat plan, to be executed in a joint venture with the world’s leading contract manufacturer Foxconn, comes about six months after it first indicated an interest in finding a suitable location for the project. While Vedanta Displays Ltd will set up a display fabrication unit with an investment of 94,500 crore, Vedanta Semiconductors Ltd will set up an integrated semiconductor fabrication unit and outsourced semiconductor assembly and test (OSAT) facility at an investment of 60,000 crore. Vedanta will hold 60% of the Gujarat project, with Foxconn owning the rest.

The agreements in this respect were signed in the presence of Union telecom and IT minister Ashwini Vaishnaw. The projects are expected to generate around 100,000 jobs in the state.

Vedanta’s project is in line with the government’s vision to achieve self-reliance in semiconductor manufacturing, Vaishnaw said. “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 a $1 trillion digital national economy," he said. In an interview last month, Vaishnaw said he expected the ground-breaking of India’s first semiconductor manufacturing plant by the end of this year.

The investment will support the development of upstream and downstream electronics manufacturing clusters and establish healthy trade linkages, Agarwal said. He said the units would supply raw materials to the entire chain of industries, be it electric vehicles, automobiles, cellphones or laptops, promoting manufacturing in the country and helping it become a global electronic giant.

“The Gujarat facility will also provide opportunities to startups and other industries to put up their operations and help the location become India’s own Silicon Valley," Agarwal said. In addition, Vedanta will promote the development of industrial clusters around its chip unit, and the company has begun talks with the state governments of Uttar Pradesh, Bihar, Maharashtra, and Andhra Pradesh.

Several investors have indicated their interest in joining Vedanta’s initiative. “The partners are arranging funds internally for the project initially, and new investors would be roped in at a later stage," Vedanta chairman said.

Vedanta and Foxconn will work closely with the state government to establish high-tech clusters with requisite infrastructure, including land, semiconductor-grade water, high-quality power, logistics, and a skill ecosystem.

In addition to making India a global partner in the supply chain, “the semiconductor fab unit will be a game-changer for the economy". Agarwal said it would create significant employment opportunities for the youth and generate revenue for the state.

The 400-acre facility is located close to Ahmedabad, making it easier to get the right talent required for this specialized production facility.

The semiconductor unit will operate on the 28nm technology nodes with a wafer size of 300mm; and the display manufacturing unit will produce Generation 8 displays catering to small, medium and large applications. It will make 40,000 wafers and 60,000 glass panels per month.

Brain Ho, vice-president of Foxconn Semiconductor Group, said selecting the Gujarat location was the culmination of an extensive analysis of possible project sites in India and across the world over a multiplicity of factors by sectoral experts.

The semiconductor plant is an achievement for India, where the government has taken several initiatives to reduce dependence on imports of electronic goods by giving impetus to domestic manufacturing of electronics, semiconductor products and components. To position India as the global hub for electronics system design and manufacturing, the government had notified four schemes for the development of a sustainable semiconductor and display ecosystem, OSAT/ATMP, in the country with an outlay of 76,000 crore.

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