Vedanta Plans To Invest Up To Rs. 60,000 Crore For Setting Up Chip Manufacturing Plant In India

Vedanta group plans to make an investment of up to Rs. 60,000 crore for setting up a chip and glass manufacturing unit in India over the next three years. This announcement from the company came days after the government of India announced the Production Linked Incentive (PLI) scheme to bring in semiconductor investments into the country. As reported by TOI, Anil Agarwal's Vedanta group is currently finalising technology and equity partnerships as well as joint ventures with top fabrication makers across the globe. This will be Agarwal's second attempt at bringing in semiconductor investments into the country. The charge will be led through AvanStrate, a Japanese glass substrate manufacturer that the company had acquired from the Carlyle Group in December 2017.

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This will be Agarwal's second attempt at bringing in semiconductor investments into India

Akarsh Hebbar, managing director of AvanStrate told TOI, "We are in the last stages of negotiations with various state governments for setting up a factory that would require between 250 acres and 400 acres. Overall investments into the project will range between $6 billion (Rs. 45,000 crore) and $8 billion (Rs. 60,000 crore) in the first two phases, following which we will carry out further assessment of the market for expansion."

AvanStrate is in the final stage of discussions with governments in Haryana, Gujarat, Maharashtra, Telangana, Tamil Nadu and Karnataka for setting up its factory and for incentives. "We are hoping to get an additional 10-15% capital investment support from the state where we invest, apart from the central government's subsidy."

The company is in the final stage of discussions with several governments for setting up its factory and for incentives

He further mentioned that the investments will be for large facilities for display glass and fabrication chips, apart from an LCD module plant. The company is reportedly in talks with global semiconductor manufacturers like TSMC, United Microelectronics Corp and Foxconn, Korean LG and Samsung, and Sharp. The talks could result in technology partnerships or combined equity investments through a joint venture. "We intend to finalise our plans over the next couple of months," he added.

Hebbar said the Vedanta Group and its chairman Agarwal are optimistic towards the semiconductor industry in India, given that there's a strong demand from the consumer electronics segment, automobile industry and allied sectors. "The funding from our group's side will be through equity and debt, apart from potential partnerships," Hebbar said, adding around 80 per cent of production will be used for the domestic market, while the rest will be for exports.