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Indian mining giant Vedanta, alongside Taiwanese chip giant Foxconn, has announced the signing of an MoU with the Gujarat government in order to set up its semiconductor and display FAB manufacturing facility.
The MoU was signed in the presence of Minister for Railways, Communications, Electronics & IT, Ashwini Vaishnaw, at a function that was held in Gandhinagar. Both companies will be investing a sum of Rs 1.5 lakh crores (nearly $20 billion) to set up the plant, to be erected near Ahmedabad, which would result in the creation of 1 lakh jobs.
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Moreover, Bhupendra Patel, CM of Gujarat has assured the cooperation of his government in the set up of the same.
“#India will fulfill the digital needs of not just her people, but also those from across the seas. The journey from being a chip taker to a chip maker has officially begun…Jai Hind!”, Founder and Chairman of Vedanta Resources, Anil Agarwal, said.
The JV will be investing $10 billion in the first phase of the plan over 2-3 years while aiming to commission the units within a few years. Moreover, the JV aims to break even in the next 4-5 years. Rs 94,000 crores will be used for setting up the FAB unit while Rs 60,000 crores for the semiconductor manufacturing facility.
This is great news for India as India is highly dependent on Taiwan, China, and others for the import of semiconductors, an essential element for anything electronic. This investment is part of the government's efforts to reduce India's dependence on other countries for semiconductors & assist the country in becoming a global hub for electronics system design and manufacturing.
Politically, this move has been favorable to the Modi government. This move comes at a time when PM Modi's home state is witnessing heavy competition from other parties with elections right around the corner. Moreover, the deal, CM Ekanth Shinde's government is being shunned for losing such a deal, which was initially being negotiated with Maharashtra.
The company's investors have reacted positively to the news as the stock surged by 6%. The stock currently trades around Rs 294 per share, up 5.7%.
Article by Aman Agarwal.
This news piece is brought to you in association with Jobaaj.com.
