Vedanta signs MoUs with Government of Gujarat to set up semiconductors and display fab units

Vedanta signs MoUs with Government of Gujarat to set up semiconductors and display fab units

Project envisages total investment of more than Rs 1,54,000 crore

The units will provide employment to around 1 lakh people

Delhi/Ahmedabad, 13 September, 2022: In a major step towards making India self-sufficient in the critical area of semiconductors and displays in line with Hon. Prime Minister Shri Narendra Modi’s bold vision to make India aatm nirbhar in key futuristic technologies, Vedanta today signed two Memorandum of Understanding (MoUs) with the Government of Gujarat to set up a semiconductor fab unit, a display fab unit, and a semiconductor assembling and testing unit in Ahmedabad district of the state. The MoU signing ceremony was attended by Union Minister Shri Ashwini Vaishnav, Gujarat Chief Minister Shri Bhupendrabhai Patel, Principal Secretary Shri Sanjay Prasad, Vedanta Group Chairman Anil Agarwal, Vedanta’s Global Managing Director, Display and Semiconductors, Akarsh Hebbar and a host of other dignitaries.

The project will attract electronics ecosystem players across the value chain entailing manufacturers of highly sophisticated and sensitive equipment, materials (high purity Gases, chemicals, wafers, photomasks), equipment service providers etc., and will put the state of Gujarat on the global silicon map. The project envisages total investment of Rs 1,54,000 crore, and it will provide employment to around 1 lakh people.

The proposed semiconductor manufacturing fab unit will operate on the 28nm technology nodes and the display manufacturing unit will produce Generation 8 displays catering to small, medium and large applications. Vedanta will hold 60% of the equity in the JV while Foxconn will own 40%. The JV will look at setting up a semiconductor manufacturing plant in the next two years.

Speaking on the occasion, Gujarat CM Shri Bhupendrabhai Patel said, “We are extremely proud and happy that the Vedanta-Foxconn JV has selected the industrial state of Gujarat for their semiconductor plant. This is a huge investment coming on the day when we complete 1 year in office which is also a testimony to the policy stability and policy support coupled with good governance & excellent infrastructure facilities existing in Gujarat. We will provide all help to the joint venture so that the plant can start its operations soon. We are determined to make our country more self-sufficient in tech and curb our reliance on imports from other countries. We sincerely hope that the hub will be the beginning of a bright future and attract investment from other multinational companies down the line.”

He added that the Gujarat Government has created a world-class industrial zone, with excellent infrastructure facilities to help strategic investments such as the semiconductor plant, to mitigate the gestation period of project timelines. “The project will be met with red carpet in Gujarat instead of any red tapism,” he remarked.

On this occasion, Union Minister for Electronics and Information Technology Shri Ashwini Vaishnav, said: “The project is in line with Hon. Prime Minister Shri Narendra Modi’s vision for achieving self-reliance in the field of semiconductor manufacturing. 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 $1 trillion digital national economy.”

Semiconductors and displays are critical to establishing India as an electronics hub and will help attract suppliers and device assemblers to setup base in India. The Indian semiconductor market was valued at $27.2 billion in 2021 and is expected to grow at a healthy CAGR of nearly 19% to reach $64 billion in 2026.

Speaking on the signing of the MoUs, Vedanta Chairman Mr. Anil Agarwal, said: “We are delighted to announce that Gujarat will be the location for our display and semiconductor fab ventures. The state is well known globally for being a manufacturing hub and I hope that India's upcoming, cutting-edge electronics ecosystem will thrive, with every state benefitting to develop their electronic manufacturing hubs. We are privileged to take one step further in supporting Prime Minister Modi's vision of aatm nirbhar Bharat in this strategic sector.”

The decision to set up the project in Gujarat comes after Vedanta and Foxconn announced in February that they will form a joint venture company in India. Vedanta has a presence in electronics and technology business through group companies Avanstrate Inc. and Sterlite Technologies. Hon Hai Technology Group ("Foxconn") (TWSE:2317) is the world's largest electronics manufacturer. Hon Hai is also the leading technology solution provider, and it continuously leverages its expertise in software and hardware to integrate its unique manufacturing systems with emerging technologies.

Mr. Brian Ho, VP, Foxconn Semiconductor Group, also present at the event, said, “I am delighted that the semiconductor plant will come up in the industrial state of Gujarat. We applaud the efforts made by the Government of Gujarat, home of Prime Minister Narendra Modi, to attract semiconductor development and upgrade government efficiency. Located in the western part of India, Gujarat has been recognized for its industrial development, green energy, and smart cities. The improving infrastructure and the government's active and strong support increases confidence in setting up a semiconductor factory. We look forward to working with our partners and the Gujarat leadership to further enhance the infrastructure required to cater to the ambitious semiconductor project”.

The broad plans for a semiconductor unit in India were announced after the COVID-19 pandemic upended global supplies of crucial electronic components used in everything from smartphones to cars. India has vowed to spend $30 billion to overhaul its tech industry and build local chip supply chains to avoid being dependent on foreign producers.