Indian conglomerate Vedanta has earmarked $15 billion for its foray into the electronic chip and display manufacturing space, and plans to scale up the investment to as much as $20 billion (about Rs 1.5 lakh crore), a senior company official said.
It expects to roll out display units, for use in mobile phones and electronics devices, by 2024 and electronic chips from Indian manufacturing plants by 2025, Vedanta Group's global managing director of Display and Semiconductor Business Akarsh Hebbar told PTI on Friday. "Semiconductor is a long-term business. We are looking at about $10 billion on display. Right now we are looking at $7 billion in semiconductors that may also go up by another $3 billion to further extend it. First 10 years, we have engaged to invest up to $15 billion. We will evaluate further investment at a later stage," Mr. Hebbar said.
He is also managing director of Avanstrate, which handles the display manufacturing business of the Anil Agarwal-led Vedanta Group.
Vedanta Group has applied for setting up a semiconductor plant and a display manufacturing unit under the government's incentive scheme for the sector.
Mr. Hebbar said that the company expected to start commercial supply of display units by 2024 and electronic chips in the 28-nanometre category by 2025.
"Display is less complicated than semiconductor fab. It would come out by the end of 2024. Mass production will begin within 6-8 months of setting up of our factory within 2024. Semiconductor will be at the end of 2025 and may be spilling over to 2026.
"Our aim is to do display by the end of 2024 and semiconductors by the end of 2025. We will focus on local demand but 25-30% may also go for export," he said.
Mr. Hebbar added that electronic components import in the country is about $100 billion, out of which semiconductors accounted for $25 billion.
The group has signed a memorandum of understanding (MoU) with electronics manufacturing giant Foxconn to form a joint venture company that will manufacture semiconductors in India while Avanstrate will handle the display business. Vedanta is the first company to make an announcement to invest in semiconductor manufacturing after the government unveiled a $10 billion (Rs. 76,000 crore) program to boost the electronic chip and display ecosystem in the country. "There are very strong PLI schemes from the government. They have given us 45-50% of the project cost upfront. That has attracted a lot of people.
"We have started with an MoU. It is non-binding. We have an initial understanding with Foxconn. We are working now towards a definitive agreement. That will also come out very soon," he said.
He said the government was providing support of 45-50% of the project cost and response from some of the State governments had also been ‘very good’, based on which Vedanta and Foxconn will work on the equity and debt structure of their semiconductor joint venture.
"The equity structure will get firmed up in the next 2-3 months," Mr. Hebbar said.
Vedanta had earlier too made an attempt to set up a display unit with an investment of $10 billion but it did not take off.
Mr. Hebbar said the MoU with Foxconn brought a lot of confidence in the project as the Taiwanese electronics manufacturing company has the technology and there are many entities in Taiwan that havd shown interest in the project.
"Taiwan entered into technology in 1962 and we have very powerful people there who want to tie up. Foxconn has been very forefront in saying that we understand how this works, there is technology that we have and we will make sure (to implement that) as long as India gives us the way forward, gives us a site to put up the plant," Mr. Hebbar said.
The project cost of semiconductors will be in the range of $6-8 billion and that of display fabrication will be to the tune of $4-5 billion in the first phase.
"We are looking at this project not just as a business venture but something that will lead to 10-fold benefit for employment, companies that are coming in. You will see local entrepreneurs talk about making their own mobile phones.
"We are looking at a $25 billion market only in semiconductors which is going to grow for mobile phones, consumer electronics and going forward even for automotive. The market needs IC (integrated circuit) chips, wafer chips," Mr. Hebbar said.
He also pointed out that the government had been active and was committed to address any issue that the semiconductor ecosystem faces.