Indian resource major Vedanta Limited and Taiwan’s Foxconn signed an agreement with the government of western state of Gujarat to set up semiconductors and display manufacturing plants entailing investment close to $20 billion, the single largest investment project in the country, statements of companies said on Friday, September 16.
As per multiple agreements signed between the parties, the semiconductor and display manufacturing units will be implemented through joint ventures of Foxconn and Vedanta wherein Foxconn will bring in the technical expertise while Vedanta will finance it.
Vedanta-Foxconn combine will set up display manufacturing unit with an investment of around $11.95 billion and a separate chip production unit will be set up at $7.58 billion in what Vedanta Limited chairman, Anil Agarwal called ‘India’s own Silicon Valley’.
“The investment will be funded through internal accruals. There is a huge rush among major countries for developing semiconductor capabilities and India will now be the fourth country to soon start manufacturing,” Agarwal said in a statement.
“In the next 15 days or so, we will identify the land and in the next two to three months, we hope to do the ground-breaking. It will take four to five years to break-even and be profitable,” he said.
The Gujarat government offers 25 percent capital subsidy and power at subsidised tariff of INR3 per unit.
Currently, 100 percent of semiconductors are imported in India. But following Vedanta project, at least 25-30 percent import substitution will be achieved and eventually the project will be ramped up to include at least 6 more manufacturing units—two or three semi-conductor fabrication units and 2-3 display fabrication units over the next 20 years, Vedanta said.