Indian natural resources conglomerate Vedanta and Taiwanese manufacturing giant Foxconn will jointly invest 1.54 trillion rupees (about $20 billion) to build semiconductor and display plants in the Indian state of Gujarat.
Mumbai-based Vedanta, founded by metals and mining billionaire Anil Agarwal, and Taipei-based Foxconn, founded by billionaire Terry Gou, on Tuesday signed two memorandums of understanding with authorities in Gujarat. The billionaire-led companies will construct a complex that includes a display-making factory, a semiconductor fabrication plant and a chip-assembly and testing plant.
“We are extremely proud and happy that the Vedanta-Foxconn [joint venture] has selected the industrial state of Gujarat for their semiconductor plant,” Bhupendra Patel, chief minister of Gujarat, said in a statement. “We sincerely hope that the hub will be the beginning of a bright future and attract investment from other multinational companies down the line.”
The manufacturing complex is the first undertaken by the Vedanta-Foxconn joint venture, which was established in February. Vedanta will hold a 60% stake in the venture, with Foxconn, which will serve as technical advisor, taking up the balance. The pair plans to set up an additional semiconductor manufacturing plant in Gujarat within the next two years.
The project comes at a pivotal time in India’s campaign to become self-reliant in semiconductor manufacturing. Spurred by a global chip shortage during the pandemic, as supply chains in China were rocked by lockdown measures, Prime Minister Narendra Modi announced a bid to position Asia’s third-largest economy as a cutting-edge tech hub.
Last year, Modi allocated $10 billion in incentives for semiconductor companies to launch new facilities. For factories developing chips thinner than 28 nanometers, government bodies can sponsor up to 50% of the total project cost for up to six years.
Riding on government support, Vedanta-Foxconn is the third entity to launch semiconductor manufacturing plants on Indian soil. In May, global semiconductor consortium ISMC–consisting of Abu Dhabi-based Next Orbit Ventures and Israel’s Tower Semiconductor, which was acquired by Intel in February–signed an MoU for a $3 billion plant in Karnataka. In July, Singapore-based IGSS Ventures signed an MoU for a $322.6 million plant in Tamil Nadu.