A joint venture of the Indian conglomerate Vedanta and Taiwanese electronics manufacturing giant Foxconn signed a Memorandum of Understanding with the Gujarat government to set up a semiconductor and display manufacturing unit in the state.
Semiconductor chips, used in cars, mobile phones and other electronics devices, are not manufactured in India at present. Eight percent of all the chips used in the world are manufactured in Taiwan, followed by China and Japan. This upcoming facility will mark the beginning of chip manufacturing in India. This is also strategically important for India because it will reduce our dependence on other countries.
Out the total investment of Rs 1,54,000 crore, Rs 94,000 crore will go into setting up the display manufacturing unit while Rs 60,000 crore will be invested for the semiconductor manufacturing facility, the official said. As per the MoUs signed by both the parties, the Gujarat government will facilitate the investor in obtaining necessary permissions and clearances from the state departments concerned.
Semiconductor chips, or microchips, are essential pieces of many digital consumer products – from cars to mobile phones and ATM cards. The Indian semiconductor market was valued at USD 27.2 billion in 2021 and is expected to grow at a healthy CAGR of nearly 19 per cent to reach $64 billion in 2026. But none of these chips is manufactured in India so far.
A massive shortage in the semiconductor supply chain last year affected many industries, including electronics and automotive. To cut dependence on imports from nations like Taiwan and China, the government brought a fiscal incentive scheme for manufacturing semiconductors in the country. Vedana-Foxconn is one of the successful applicants for the Production Linked Incentive (PLI) scheme for semiconductors.