Vedanta to launch first made-in-India chip in 2.5 years: Anil Agarwal

Anil Agarwal - Vedanta Limited

Vedanta chief Anil Agarwal said that the first made-in-India chips from the company's planned fab will roll out in the next 2.5 years, while reaffirming that the process to set up a chip manufacturing unit is on the track as the company has found a technology partner.

"Vedanta is fully committed to a fab and a display unit in India. David Reed (CEO of semiconductor fab unit) has created a fabulous plan to execute the fab venture and similarly YJ Chen for display glass manufacturing," he said.
"We have identified a tech partner for fab and are in the process of tying up with them," he added.

Also Read: Vedanta to begin semiconductor plant after govt approval for revised plan

Vedanta's fab ambitions have been hitting a few hiccups, first after the government returned an earlier proposal on grounds of a missing technology partner. While the company has been reportedly inking memoranda of understanding with some international companies like STMicroelectronics, the government wants applicants to have veteran chip technology players to invest as a joint venture partner.

The mines and mineral company hit yet another roadblock recently when its JV partner Foxconn, which is one of the biggest Apple suppliers, checked out of the partnership and instead decided to venture on its own.

Now and then, industry experts have also pointed out that Vedanta may not have the massive financial arsenal required to set up a fab and keep it running in what is said to be a very viciously cyclical industry.

Also Read: Identified world class tech partner, in process of tying with them: Anil Agarwal on Vedanta's chip plans

''Vendata has a good cash flow, we will make a capital allocation in Vedanta and there is a queue of people to give us equity and debt...but we want the tie-ups to be in place first, and have ecosystem,'' Agarwal said today, countering those criticisms.

The Vedanta chief also said that the first phase of its semiconductor project will involve $5 billion investment of the overall $20-billion outlay.

The Semicon India roadshow comes at a time when India is trying to attract major semiconductor players to set up chip fabrication and assembling plants in the country with a $10 billion subsidy programme.

During Modi's visit to the US, semiconductor major Micron committed to set up a $2.7 billion assembling plant in the country. According to estimates, the Centre and state government of Gujarat will cumulatively bear 70 percent of the cost of the project in the form of subsidies.

Meanwhile, semiconductor equipment maker Applied Materials has said it would invest $400 million to design chip making machinery in the country.

However, the government has yet been unable to attract any major foreign foundry to the country at a time when advanced economies like the US, Germany, the European Union and Japan have announced large subsidy programmes in a global race to corner the semiconductor pie.