First chip factory Vedanta Foxconn to invest Rs 1.54 lakh crore in Gujarat Ahmedabad

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  • Vedanta-Foxconn to establish India’s first chip factory
  • Vedanta-Foxconn 60:40 joint venture to set up factory in Ahmedabad
  • The plant will start producing in two years

India’s first chip factory: Mining conglomerate Vedanta and Taiwanese electronics manufacturing giant Foxconn will make one of the largest investments in history of Rs 1.54 lakh crore to establish India’s first semiconductor plant in Gujarat.

The Vedanta-Foxconn 60:40 joint venture will establish a semiconductor manufacturing unit, a display manufacturing unit and a semiconductor assembly and test unit on a 1,000-acre site in Ahmedabad district.

“The plant will start production in two years,” Vedanta chairman Anil Agarwal told PTI after signing the memorandum of understanding (MoU) with the Gujarat government.

Semiconductor chips, or microchips, are essential parts of many digital consumer products, from cars to mobile phones to ATM cards. The Indian semiconductor market was valued at $27.2 billion in 2021 and is expected to grow at a healthy CAGR of almost 19% to reach $64 billion in 2026. But none of these chips are made in India until the moment.

A massive shortage in the semiconductor supply chain last year hit many industries, including electronics and automotive.

To reduce dependence on imports from countries such as Taiwan and China, the government introduced a tax incentive scheme for semiconductor manufacturing in the country. Vedana-Foxconn is one of the successful applicants for the production-linked incentive (PLI) scheme for semiconductors.

“This is the biggest investment ever made in Gujarat… ours will be the country’s first semiconductor plant,” Agarwal said, adding that local chip manufacturing will make laptops and tablets affordable.

Prime Minister Narendra Modi hailed the MoU as one that will boost the economy and create jobs.

“This MOU is an important step in accelerating India’s semiconductor manufacturing ambitions. The investment of Rs 1.54 lakh crore will create a significant impact in boosting the economy and employment. This will also create a huge ecosystem for ancillary industries and will help our MSMEs,” he tweeted.

In addition to Vedanta, a consortium made up of Dubai-based NextOrbit and Israeli tech company Tower Semiconductor signed an agreement with the Karnataka government for a plant in Mysuru, while Singapore-based IGSS Venture chose Tamil Nadu as a location for your unit.

Gujarat Department of Science and Technology Secretary Vijay Nehra, who signed the memorandum of understanding on behalf of the state government, said that 8 percent of all chips used in the world are made in Taiwan, followed by China and Japan. .

“This upcoming facility will mark the beginning of chip manufacturing in India. This is also strategically important for India because it will reduce our dependence on other countries.”

Of the total investment, Rs 94,000 crore will be spent on setting up the display manufacturing unit, while Rs 60,000 crore will be invested in the semiconductor manufacturing plant, the official said.

According to the memorandums of understanding signed by both parties, the Gujarat government will make it easier for the investor to obtain the necessary permits and authorizations from the concerned state departments.

“The Gujarat government will also extend tax and non-tax incentives and benefits as outlined in the Gujarat Semiconductor Policy-2022.

Gujarat is the only state that has such a policy exclusively for the semiconductor industry,” Nehra said.

Gujarat Chief Minister Bhupendra Rajnikant Patel assured that his government will provide cooperation to the investing entity to establish the facility and make it a success.

“We will provide all the help to the joint venture so that the plant can start operations soon. We are determined to make our country more self-sufficient in technology and curb our dependence on imports from other countries. We sincerely hope that the center will be the beginning of a bright future and attract investment from other multinational companies in the future,” he said.

In his speech, Union Telecom and IT Minister Ashwini Vaishnaw said that the prime minister has set himself a target of creating 1 million rupees job opportunities in the electronics manufacturing sector.

“When Prime Minister Modi launched Digital India (initiative) almost seven years ago, we used to wonder where this journey would take us in the future, because the PM’s thought process was completely different,” he said.

The journey began with initiatives like Startup India and Make In India, Vaishnaw said. Today, India has 70,000 startups, including 100 unicorns, the minister said, adding that India has become the second largest mobile phone maker in the world.

He said Indian companies make electronics worth Rs USD 80 billion, or almost Rs 6,00,000 crore, every year.

“Under the leadership of the prime minister, we created such an ecosystem that has created 25,000 jobs in the electronics sector alone,” he said.

“Now, the prime minister has set himself the goal of bringing the figure from 25 lakh to one crore. To do so, we are working to bring the production of electronics from the current USD 80 billion to USD 300 billion, which which is roughly equivalent to Rs 25,000,000 crore,” Vaisnaw said.

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