Oil-and-mining major Vedanta and world’s largest contact manufacturer Foxconn will form a joint venture company that will manufacture semiconductors in India, making the JV the first such to respond to government’s policy initiative to make semiconductors within the country.
Vedanta will be the majority shareholder in the JV which will be chaired by Vedanta chairman Anil Agarwal, according to a statement by the two parties issued on Monday.
"This first-of-its-kind joint venture between the two companies will support Indian Prime Minister Narendra Modi’s vision to create an ecosystem for semiconductor manufacturing in India,” the groups said in a statement.
Discussions are currently ongoing with a few state governments to finalise the location of the plant.
Vedanta Group has presence in electronics and technology business through group companies, Avanstrate Inc. and Sterlite Technologies.
Mint had reported in December last year that the Vedanta group was planning to invest up to $15 billion over the next 5-10 years to make displays and semiconductor chips in India, through group company Avanstrate Inc. The investment will be done in a phased manner and will comprise an integrated display fabrication facility and a separate semiconductor plant. Discussions are ongoing with various states including Gujarat, Tamil Nadu, Maharashtra and Haryana. The joint venture will provide a significant boost to domestic manufacturing of electronics in India.
Foxconn, popularly known as one of the largest iPhone assembler globally, was also one of the first large contract manufacturers to support the government’s Make in India campaign back in 2015-16 for boosting domestic manufacturing. The Taiwanese electronics maker has since set up some production hubs in the country.
The Vedanta-Foxconn joint venture is the first to formally announce its plans after the government on 16 December unveiled a $10 billion incentive scheme to encourage companies to build semiconductor and display fabs. The Central government wil provide financial support of up to 50% of the project cost to eligible companies, and 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 a research ecosystem. India aims to set up at least two greenfield semiconductor fabs and two display fabs under the scheme.