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NEW DELHI: Oil-to-metals conglomerate Vedanta Ltd. along with Taiwan’s Foxconn on Tuesday signed a pact with the Gujarat government for investing 1.54 trillion to set up a semiconductor and display FAB manufacturing unit in the state.

As per the memorandum of understanding (MoU), Vedanta Displays Ltd. will setup the display FAB unit at an investment of 94,500 crore and Vedanta Semiconductors Ltd. will set up an integrated semiconductor manufacturing unit and OSAT facility for 60,000 crore. Foxconn will be the technical partner. Vedanta will hold 60% of the Gujarat project, with Foxconn owning the rest.

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

Speaking to Mint, Vedanta Resources‘s chairman Anil Agrawal said India would need at least a couple of factories for becoming a hub of chip manufacturing and meeting the needs of country and the world.

The proposed investment by Vedanta and Foxconn will support the development of upstream and downstream electronics manufacturing clusters and establishing of healthy trade linkages, Agrawal said.

There are some interesting proposals from Andhra Pradesh, Maharashtra as well, and Vedanta may look at setting up a second plant starting operations at the Gujarat unit, Agrawal said adding that production from the Gujarat unit will likely start by 2024.

The location of the new facility, spread over 400 acre, is close to the capital Ahmedabad.

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 fabrication unit will prove to be a game-changer for the economy. It will create significant employment opportunities for the youth and generate revenue for the state, Vedanta’s chairman said.

“The Gujarat facility will also provide opportunities to startups, other industries to put up their own operations and help the location become India’s own Silicon Valley much bigger in size than the 100 mile off big valley in the US," Agrawal said.

He added that the company will also promote development of industrial clusters based around its chip making unit and for this, talks have already been initiated with governments of Uttar Pradesh, Bihar, Maharashtra, Andhra Pradesh.

Agrawal said many investors have indicated their preference to join the initiative. “The partners are arranging funds internally for the project initially and needy its would be roped in at a later stage," he said.

India has taken several initiatives to reduce dependence on imported electronic goods by providing impetus to domestic manufacturing of electronic, semiconductor products and components. To position India as the global hub for electronics system design and manufacturing, the Union government has notified four schemes for the development of sustainable semiconductor and Ddsplay ecosystem, OSAT/ATMP in the country with an outlay of 76,000 crore.

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