Vedanta and Foxconn are to invest 1.54tn rupees ($19.5bn) in Prime Minister Narendra Modi’s home state of Gujarat to build one of India’s first semiconductor manufacturing complexes — part of a high-stakes, government-backed push to build domestic chipmaking capacity.The Indian mining and industrial group and the Taiwanese contract manufacturer chose Gujarat over neighbouring Maharashtra, which was also vying for the business, for their joint venture. Vedanta’s chair Anil Agarwal said it would bring “India’s own Silicon Valley?.?.?.?a step closer now”. 

Under agreements signed between the companies and Gujarat’s government, they will set up an integrated semiconductor and display production complex aimed at feeding India’s burgeoning demand for microchips in the mobile phones, cars, computers and other devices it makes. Vedanta and Foxconn will hold 63 per cent and 37 per cent stakes respectively in the chipmaking venture, Agarwal said, and Vedanta will hold 100 per cent of the facility’s display glass production unit.

“India has enough demand for five to 10 such fabs, and we are going to mostly capture the local demand,” Vedanta’s chair told the Financial Times. “Total demand today in both semiconductor and glass is about $30bn-$35bn, and India is going to be in 10 years’ time a $350bn market.”