Vedanta picks up Gujarat to set up semiconductor plants

(Representative image)

Taking the first major step in its $20-billion joint venture with Taiwan's Foxconn, Vedanta Ltd has selected Prime Minister Narendra Modi's home state of Gujarat for its semiconductor project, news agency Reuters reported. The project will include display and semiconductor facilities near Ahmedabad.

The Mumbai-headquartered oil-to-metals conglomerate has obtained financial and non-financial subsidies including capital expenditure and cheap electricity from Gujarat to build the semiconductor plants.

According to the report, Maharashtra, Telangana, and Karnataka were also in the running to host Vedanta-Foxconn's mega project. But in the last leg of negotiations in recent weeks, Gujarat pipped Maharashtra to the post.

An announcement is expected this week with a formal signing of a memorandum of understanding between the two sides, which is likely to be attended by Chief Minister Bhupendrabhai Patel and Vedanta officials.

Notably, while lobbying for incentives, Vedanta had sought 1,000 acres (405 hectares) of land free of cost on a 99-year lease, and water and power at concessionary and fixed prices for 20 years.

India's semiconductor market is estimated to reach $63 billion by 2026 from $15 billion in 2020. Most of the world's chip output is limited to a few countries like Taiwan and late entrant India is now actively luring companies to “usher in a new era in electronics manufacturing” as it seeks ways to have seamless access to chips. It decided in February to diversify into chip manufacturing and formed a joint venture with Foxconn.