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EXC: Mining Giant Vedanta Says Foxconn JV For Chips Seeing Indian States Offer Free Land

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By: Rohan Dua
Updated: May 1, 2022 13:50
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BENGALURU: Indian oil and metal major Vedanta has said the company has been offered free land, up to 350-acres, by several states in the country as it bids to enter the semiconductor and display fabrication industry with Taiwan major Foxconn which will also make it India’s first chipmaker.

Foxconn is the company behind the manufacturing of Apple iPhones and iPads.

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“It’s a matter of fact that the industry that comes in this ecosystem needs certain subsidies. We have a baseline demand for 350-400 acres and another 350-acres for our ecosystem that includes workforce and other units. The states are themselves offering us land. Over and above this if any government wants to give, they are also welcome,” Akarsh Hebbar, Vedanta’s Global Managing Director of Display and Semiconductor Business, told The New Indian in Bengaluru.

Hebbar was attending the Semicon 2022, a three-day event by the Ministry of electronics and information technology in Bengaluru. He also gave a presentation on Vedanta’s debut in this industry.

Vedanta had entered into a JV with Foxconn with an investment outlay of USD 20 billion. Vedanta officials also hinted that they are in advanced stages of talks with Gujarat, Telangana, Karnataka, Odisha and Maharashtra for this mega project.

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Hebbar also said initial camaraderie between Vedanta’s chairman Anil Aggarwal and Foxconn’s Young Liu is bringing the two countries closer.

He said that Vedanta’s diversification was impressive in the past with EBITDA of “6-8 billion dollars”. “We had been eyeing this since 2011. But now we have two visionary leaders like PM (Narendra) Modi in the country and our chairman, it’s a conducive environment. There is an active push from both of these people. Our vision is we are a resource company and we want import substitution to happen in India. Be it oil or gas. Producing our own metals and mines. We are taking that base silica. We are making that raw material. We are making that glass. That will bring India into a whole independent association….” said Hebbar.

Hebbar agreed that even though competition and risk are huge in the fab industry, the ROI is decent at 10-12 %.

“It’s not that there is a great margin in this industry. But it’s useful to be strategic for India to build that ecosystem. India will see GDP multiplying 3 or 4 times. This is why we want the state’s help with subsidies on electricity and water to us. We want proximity to ports. We have experience in terms of optical fibre plant in Aurangabad with Sterlite Technologies. Semiconductor and glass manufacturing companies need very strong and clean rooms. We have that,” said Hebbar.

The mining major is now likely to raise USD 2-3 billion from banks for this mega project that will see India become a major player in the semiconductor market as it aims to build wafers of its own.

“So, Foxconn has four foundries. They build 48-65 nm chips. Taiwan is at the forefront of this industry and Foxconn has done this time and again. They know testing margins and the kind of quality that comes out. So, this SPV will be key to India now. Foxconn’s roadmap will be for India. We are thankful to PM Narendra Modi for producing this conducive environment in this country,” said Hebbar.

On the first two days of Semicon, as several key players including Applied Materials, SEMI, Intel, Synopsys, AMD among others participated in the event, Union MoS Rajeev Chandrasekhar said semiconductors are critical to establishing India as an electronics hub and would attract suppliers and device assemblers to set up base in India.

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