According to the MOU signed between the two companies, Vedanta will hold the majority of the equity in the JV, while Foxconn will be the minority shareholder. Vedanta Chairman Anil Agarwal will be the Chairman of the joint venture company.
This marks the first major announcement after the Indian government launched Rs 76,000 crore production-linked incentive (PLI) scheme for the sector. The new incentives package is aimed at creating a comprehensive ecosystem for semiconductor chip design, packaging and manufacturing that can attract global investment. The funding, which will be provided over a period of six years, is expected to bring in investment of up to Rs 1.7 lakh crore.
Vedanta group had in December said that it will invest up to Rs 60,000 crore to set up chip and glass manufacturing ecosystem in India over the next three years. This is Agarwal’s second attempt at brining semiconductor investments in India
As per the official statement released on Monday, the targeted project plans to invest in manufacturing semiconductors. It will provide a significant boost to domestic manufacturing of electronics in India.
Vedanta group said that discussions are currently ongoing with a few state Governments to finalize the location of the plant.
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The collaboration between Vedanta and Foxconn follows the India Government’s recent policy announcement for Electronics Manufacturing & PLI scheme for incentivizing organizations to contribute towards development of this sector. This will be the first joint venture in the electronics manufacturing space after the announcement of the policy.
Union Minister for Electronics and Information Technology Ashwini Vaishnaw earlier told ET the government would not only provide infrastructure support but also fast-track clearances, with approvals coming in for a large chip manufacturing facility in the next “four to six” months,
Under the scheme, the government will fund 50% of the project on an equal rights basis for companies that are “found eligible”
The Indian government is aiming to woo semiconductor companies like TSMC and Intel along with display manufacturers with the new scheme. Taiwanese manufacturers Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) are reportedly exploring investments for chip manufacturing in India through possible partnerships.
The government in December said that it will work closely with the state governments to establish “High-Tech Clusters” with requisite infrastructure in terms of land, semiconductor grade water, high quality power, logistics and research ecosystem to approve applications for setting up at least two greenfield semiconductor fabs and two display fabs in the country.
