In the largest investment by a corporate group in an Indian state, billionaire Anil Agarwal’s Vedanta has signed an in-principle agreement with the Gujarat government to set up a Rs 1.54 lakh crore semiconductor and display manufacturing unit in the coastal state.
Vedanta is tying up with Foxconn of Taiwan to set up the unit. The companies were earlier reported to have zeroed in on Maharashtra for the strategic investment.
Vedanta founder and chairman Agarwal indicated that he had not entirely given up on plans for Maharashtra.
“The company will create a hub for manufacturing of iPhones and TV equipment at Maharashtra, which will be a kind of forward integration for Gujarat JV Plant,” he told CNBC-TV18.
Here are some key facts about Vedanta-Foxconn’s semiconductor deal with Gujarat:
How will the joint venture shape up?
Vedanta will hold 60 percent of the equity in the venture, with Foxconn owning the remaining 40 percent. Foxconn is the technical partner in the venture and the oil-to-metals conglomerate Vedanta is financing the project as it looks to diversify into chip manufacturing.
Also read: India-made semiconductors will reduce laptop price to Rs 40,000 from Rs 1 lakh, says Anil Agarwal
A strategic investment at a strategic location
Gujarat is known as a manufacturing hub. Located in western India, Gujarat has been recognised for its rapid industrial development, promotion of green energy and smart cities.
The improving infrastructure and the government's active and strong support provide the required impetus in setting up the semiconductor factory, a company statement said.
The state has created a world-class industrial zone with infrastructure facilities to help strategic investments such as the semiconductor plant, to reduce the gestation period of such projects, Gujarat chief minister Bhupendrabhai Patel said at the signing ceremony.
The investment is a step towards achieving Prime Minister Narendra Modi’s vision of Atma Nirbhar Bharat (self-reliant India) for reducing dependence on semiconductor imports. The Gujarat plant would go a long way in helping build the $1-trillion digital national economy, according to the Vedanta statement.
Project significance
The project will attract entities across the electronics ecosystem value chain, including manufacturers of sophisticated and sensitive equipment, materials (high purity gases, chemicals, wafers and photomasks), equipment service providers, and put Gujarat on the global silicon map.
A complementary value-added business
Vedanta has a presence in the electronics and technology business through group companies Avanstrate and Sterlite Technologies.
Foxconn is the world's largest electronics manufacturer. The semiconductor business is critical to establishing India as an electronics hub and will help attract suppliers and device assemblers to set up a base in India.
Job creation
The investment is expected to create 100,000 job opportunities.
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