Vedanta has decided to set up its semiconductor manufacturing unit in Gujarat and has identified land for it. According to Reuters, an announcement to this effect is expected later this week with a formal signing of a memorandum of understanding between the state government and the company.
The Vedanta Group has an initial investment plan of $2 billion for the semiconductor unit which would go up to $20 billion as the company scales up the project.
“Various state governments have approached us for providing land for the project, and we are also in talks with several of them. We will soon identify the location to set up the unit. We want to see which state is able to create an entire cluster of units,” Anil Agarwal, Vedanta Group chairman had told FE in an interview earlier.
Vedanta is amongst the five companies which have applied for the government’s Rs 76,000-crore incentive scheme for development of semiconductors and display manufacturing ecosystem in the country. In fact, Vedanta has submitted two proposals – one where it has formed a joint venture with Foxconn for manufacturing chips and the second, on its own for display fabs.
The company is confident of getting global orders once its semiconductor manufacturing unit is up and running in India. Vedanta Group is already into manufacturing fab glasses and optic fibre globally, so it is not going to be a new business for the company. “We already make fab glasses in Japan, South Korea, and Taiwan and have 20,000 people working for us, so we are already in the business,” Agarwal had said.
He had added that funds for the semiconductor business – which is capital intensive and has a long gestation period — in India would not be a problem as other businesses like oil and gas, mining, iron and steel would generate enough cash to feed the fab unit.
According to Agarwal, the government’s incentive scheme on semiconductor has the potential to turn India into another Silicon Valley or Taiwan.
He has said that electronics is one sector where the country has immense potential to grow. “Today we only have branded products like mobile phones etc, once we have the raw material also (chips), the cycle would be complete. We can create a Silicon Valley in India or another Taiwan,” Agarwal had told FE.