Vedanta said that it will take the lead on the construction of the semiconductor factory in Gujarat as part of its joint venture with Taiwanese contract manufacturer Foxconn, which will be responsible for bringing in technology partners. Construction of the plant is expected to begin by the end of the current fiscal year.
“There will be a bunch of technology. Most of it is in Foxconn and we will start enabling more licences as needed. We do not believe we need a third equity partner as much as we need parts. Whatever help we need from others, we will add to that,” Akarsh Hebbar, managing director of Vedanta’s global display and semiconductor business was quoted as saying by the Economic Times.
Vedanta-Foxconn Semiconductors, the joint venture between India’s Vedanta group and Foxconn, aims to begin generating revenue from its semiconductor fabrication unit in India from FY27, said chief executive of the venture, David Reed.
The joint venture is currently awaiting government approval for the $20 billion project. The JV has identified land in Gujarat and is talking to the government about the landfill.
“We have signed MoUs with companies in Japan and Korea. There is $80 billion that the ecosystem can earn because semiconductor and display units are coming here,” Hebbar said.
Chip manufacturing incentives
The JV is one of the five applicants seeking government incentives under a $10-billion package announced in December 2021 to promote domestic semiconductor manufacturing.
Under the scheme, India is committed to footing 50% of the project cost, along with providing other incentives.
The JV is aiming to order equipment for the plant by the end of FY24.
“The intent is to reduce the risk with this technology from Foxconn. The other part of reducing the risk is that Foxconn has experience with these large mega projects … building an ecosystem, not only the infrastructure, the supplier but also the social side,” Reed told the publication.
Vedanta-Foxconn will start with 40-nm chips
Reed said that the JV plans to begin manufacturing 40-nm chips on a factory line with a capacity of 40,000 wafers per month.
He said that the JV will start the pilot for the project with 5,000 wafers per month.
After starting the 40-nm chip manufacturing, the Vedanta-Foxconn combine would then start manufacturing 28nm chips.
The Vedanta-Foxconn JV previously announced it will invest around $19 billion, at a 63:37 ratio, to set up display and semiconductor fabrication units. The Gujarat unit will see an investment of $8.15 billion.
The project will generate 80,000 to 100,000 jobs.
“We are going to see 150 companies in the ecosystem start locating in India even before our fab comes up,” Reed separately told Mint newspaper, adding that the JV is running everything in parallel, as “we don’t want to keep everything hung up until we get the approval. Government approval anytime this year will enable us to make sure the funding happens according to what the project requires.”