The world’s largest contract manufacturer Hon Hai (better known as Foxconn) and mining major Vedanta have joined forces to set up a company that will manufacture semiconductors in India.
The new company is in response to Indian government's call create a semi-conductor hub in the country.
Vedanta is the first company to make the announcement to invest in semiconductor manufacturing after the Narendra Modi government approved a comprehensive program for the development of sustainable semiconductor and display ecosystem in the country at a total cost of Rs 76,000 crore.
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Location of new company not decided yet
Vedanta had earlier attempted to enter the semiconductor space with a display unit five years ago, but the project could not take off.
According to the MoU signed between the two companies, Vedanta will hold the majority of the equity in the JV, while Foxconn will be the minority shareholder. Vedanta Chairman Anil Agarwal will be the Chairman of the joint venture company.
The Vedanta Group has presence in electronics and technology business through group companies, Avanstrate Inc and Sterlite Technologies.
"The targeted project plans to invest for manufacturing semiconductors. It will provide a significant boost to domestic manufacturing of electronics in India. Discussions are currently ongoing with a few State Governments to finalize the location of the plant," the two companies said in a statement.
The two companies did not reveal how much money they are investing in the new project.
The Vedanta Group had in December 2021 said that it was planning to invest close to Rs 60,000 crore ($15 billion) over the next 5-10 years to make displays and other semiconductor chips in India. The investment will be made through Avanstrate Inc, the glass substrate manufacturer.
The investment will be for Integrated Display Fab facility and a separate semiconductor facility, it had said.
Foxconn, for its part, is setting up a semiconductor design centre in New Taipei city.
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