After Tuesday's MoU signing with Gujarat government, Vedanta Chairman Anil Agarwal assured media that the project will begin production in two years.
The first semiconductor plant in India will be built in Gujarat with a one-of-a-kind investment of Rs 1.54 lakh crore from mining behemoth Vedanta and Taiwanese electronics manufacturing giant Foxconn. On a 1000-acre plot of land in the Ahmedabad area, the 60:40 joint venture between Vedanta and Foxconn will build a semiconductor fabrication unit, a display fabrication unit, and a semiconductor assembling and testing unit.
After Tuesday's Memorandum of Understanding (MoU) signing with the Gujarat government, Vedanta Chairman Anil Agarwal assured the media that the project will begin production in two years. Automobiles, mobile phones, ATM cards, and other digital consumer goods all depend on semiconductor chips, also known as microchips.
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The market for semiconductors in India was valued at USD 27.2 billion in 2021, and it is anticipated that it will increase at a brisk CAGR of around 19% to reach $64 billion in 2026. But up until now, none of these chips had been produced in India.
Electronics and the automobile sectors were among those last year that were significantly impacted by a severe shortfall in the semiconductor supply chain. The government introduced a fiscal incentive programme for domestic semiconductor production to reduce reliance on imports from countries like Taiwan and China. One of the chosen candidates for the Production Linked Incentive (PLI) scheme for semiconductors is Vedanta-Foxconn.
"This is the largest ever investment in Gujarat... Ours will be the first semiconductor plant in the country," Agarwal said, adding local manufacturing of chips will make laptops and tablets affordable. Agarwal said the Gujarat unit will manufacture 40,000 wafers (that's used in fabricating integrated circuits) and 60,000 panels per month to begin with. Prime Minister Narendra Modi hailed the MoU as one that will boost the economy and create jobs.
According to Vijay Nehra, secretary of the Gujarat Science and Technology Department, who signed the MoU on behalf of the state government, 8% of all chips used worldwide are made in Taiwan, with China and Japan following.
The official stated that out of the entire investment, Rs 94,000 crore will be used to establish the display production unit and Rs 60,000 crore will be used to build the semiconductor manufacturing plant. In accordance with the Memorandum of Understandings that both parties have signed, the Gujarat government would assist the investor in securing the required approvals and clearances from the relevant state authorities.
"The Gujarat government will also extend fiscal and non-fiscal incentives and benefits as outlined under the Gujarat Semiconductor Policy-2022. Gujarat is the only state to have such a policy exclusively for the semiconductor industry," Nehra said. Bhupendra Rajnikant Patel, the chief minister of Gujarat, guaranteed that his state would work with the investing group to put up the facility and ensure its success.
The Prime Minister has set a goal of creating one crore job possibilities in the electronics manufacturing sector, according to Union Telecom and IT Minister Ashwini Vaishnaw. According to Vaishnaw, the process began with initiatives like Startup India and Make In India.
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According to the minister, India now boasts 70,000 businesses, including 100 unicorns, and it is now the world's second-largest producer of mobile phones. According to him, Indian businesses produce electronics products worth over Rs 6,00,000 crore, or about Rs 80 billion, each year. He noted that under PM's leadership 25 lakh jobs has been created in electronics sector.
"Now the PM has given a target of taking the number from 25 lakh to one crore. To do that, we are working on taking electronics production from the present USD 80 billion to USD 300 billion, which roughly comes to Rs 25,00,000 crore," Vaishnaw said.
In order to reduce their dependency on imports, nations like the US are increasing domestic manufacturing capacity. Geopolitical tensions with China and a global lack of semiconductors have fueled Washington's desire to move manufacturing back home in order to reclaim global supremacy. The US has set aside enormous sums of money and is apparently considering alliances with other countries.
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(With inputs from PTI)
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