India’s diversified mining company Vedanta Ltd. and Taiwan’s Foxconn signed a deal to set up a $20 billion semiconductor project in Gujarat. The project is intended to produce chips and displays near Ahmedabad. Bhupendrabhai Patel, the Chief Minister of Gujarat, said that the establishment of this manufacturing unit would create more than 100,000 jobs, and the state government is ready to provide all types of support to the project, which Gujarat won in a tight race with Maharashtra.
Here are 10 things you should know about the Vedanta-Foxconn deal:
- The $20 billion investment coming from the Vedanta-Foxconn deal will be used to establish India’s first chip (semiconductor) manufacturing plant, a display fab plant, along with a semiconductor assembling and testing unit.
- The manufacturing plant will cover around 1000-acre land in Ahmedabad.
- After signing the MoU (Memorandum of Understanding) with the government of Gujarat, Anil Agrawal, Vedanta Chairman, said that the production work would start in the plant within 2 years.
- In this project, Foxconn is handling the technical aspects while mining conglomerate Vedanta is financing the venture.
- Vedanta and Foxconn will collaborate with the Gujarat government to set up ultra-modern infrastructure, including land, power, and semiconductor-grade water.
- The venture will create more than 100000 jobs in Gujarat.
- Semiconductor chips are a vital component of numerous digital consumer products, including smartphones, debit & credit cards, and cars. The semiconductor market in India was estimated at $27.2 billion in 2021 and is expected to reach $64 billion by 2026 with a healthy CAGR of 19%. But, no chips have been manufactured in India so far.
- Vedanta is the third company to declare a chip manufacturing unit in India after Singapur-based IGSS ventures and international semiconductor consortium ISMC, which are establishing chip manufacturing plants in Tamil Nadu and Karnataka.
- Many industries, including electronics, automotive, and healthcare, witnessed a huge shortage in the semiconductor supply chain last year.
- The government of India has introduced a financial incentive scheme for the production of semiconductors in India and cut the dependency on chip imports from China and Taiwan. Vedanta-Foxconn has successfully matched the criteria of the Production Linked Incentive (PLI) plan for semiconductors.