Vedanta, Foxconn to manufacture Made in India chips

In a major boost to the semiconductor manufacturing ecosystem in India, Indian conglomerate Vedanta has announced that it has partnered with Hon Hai Technology Group also known as Foxconn to form a joint venture to manufacture semiconductors in India.

According to the MoU (memorandum of understanding) signed between the two companies, Vedanta will hold the majority share in the joint venture and Vedanta Chairman Anil Agarwal will be the chairman of the new company. Times of India reports that Foxconn will hold a 40% stake in the joint venture while Vendata will hold a 60% stake. Together the two companies will invest to manufacture semiconductors in India. “It will provide a significant boost to domestic manufacturing of electronics in India. Discussions are currently ongoing with a few State Governments to finalise the location of the plant,” Vendata and Foxconn said in a joint statement.

“This will be the first joint venture in the electronics manufacturing space after the announcement of the policy,” the two companies added. This is also the second attempt of Vedanta to enter the semiconductor market in India. Last year, the company had tried to set up a chip and glass manufacturing ecosystem in India by making an investment of about Rs 60,000 crore. However, the project failed to take off.

About the PLI Scheme

PTI reports that Vedanta is the first company to make the announcement to invest in semiconductor manufacturing after the Indian government announced the Rs 76,000-crore Product Linked Incentive (PLI) scheme to boost the electronic chip and display ecosystem in the country.

As a part of the PLI scheme, the government will extend a fiscal support of up to 50% for setting up of semiconductor fabs and display fabs in India. As a part of the scheme, the government aims to set up at least two greenfield semiconductor fabs and two display fabs in the country. Separately, the government has also announced incentives worth Rs Rs 55,392 crore under the PLI scheme for large scale electronics manufacturing in India.

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