Gujarat is home to India’s first chip factory, which will cost $20 billion

Last year, a significant shortfall in the semiconductor supply chain impacted a wide range of sectors, including electronics and automobiles.

Vedanta and Foxconn, the Taiwanese electronics manufacturing behemoth, will invest 1.54 lakh crore to build India’s first semiconductor manufacturing factory in Gujarat.

Vedanta and Foxconn’s 1.54 lakh crore investment will be utilised to establish India’s first semiconductor production facility, a display fab unit, and a semiconductor assembling and testing unit.

The factories would be built on a 1000-acre plot of land in Ahmedabad.”The plant will start production in two years,” Vedanta chairman Anil Agarwal told PTI after signing the MoU with the Gujarat government.

Foxconn is the technical partner, while Vedanta, an oil-to-metals giant, is funding the project.

According to a joint statement, Vedanta and Foxconn will collaborate closely with the state government to build high-tech clusters with the necessary infrastructure, including land, semiconductor-grade water, and electricity.

The firms have stated that the project will generate over 100,000 employment in Gujarat. Semiconductor chips, sometimes known as microchips, are crucial components of many digital consumer items, ranging from automobiles to mobile phones and ATM cards. In 2021, the Indian semiconductor industry was valued at $27.2 billion, and it is predicted to rise at a high CAGR of about 19% to $64 billion by 2026. However, none of these chips are currently made in India.

Vedanta is the third business to announce the site of chip production in India, following multinational consortia ISMC and Singapore-based IGSS Ventures, which are establishing operations in Karnataka and Tamil Nadu, respectively.

Last year, a significant shortfall in the semiconductor supply chain impacted a wide range of sectors, including electronics and automobiles. To reduce reliance on imports from Taiwan and China, the government implemented a financial incentive plan for domestic chip manufacturers. Vedanta-Foxconn is one of the successful candidates for the semiconductor Production Linked Incentive (PLI) scheme.