Vedanta Resources Limited has reportedly formed a JV (joint venture) with Hon Hai Precision Industry Co. Ltd., also known as Foxconn, to manufacture semiconductors in India.
According to a joint statement issued by the firms, this is the first joint venture in the electronics manufacturing segment post the performance-linked incentive (PLI) initiative.
The MoU signed between the two firms mentioned that Vedanta will be the majority shareholder in the joint venture whereas Foxconn will hold a minority stake. Vedanta’s Anil Agarwal will be appointed as the Chairman of the joint venture.
In December last year, the Government of India sanctioned a PLI initiative for producing display boards and semiconductors in the country, aiming at an investment of USD 10.12 billion (Rs 76,000 crore) over the next 5-6 years. Along with this, India Semiconductor Mission (ISM) was also recently announced with the intention of alluring large investments for production plants in the middle of a global chip crisis.
The company is holding talks with a few state governments to finalize the plant’s location. However, company officials have not revealed the estimated manufacturing capacity, quantum of investment, and location of the project.
In January, the Vedanta Group stated its intention to invest USD 15 billion in producing semiconductor chips and displays over the next five years. It completed the acquisition of AvanStrate, a Japan-based manufacturer of glass substrate, from The Carlyle Group.
It is worth noting that Hon Hai Technology Group is a Taiwan-based multi-billion manufacturer of electronics. It is famed for making iPhones among other popular products. The company affirmed in December that it increased its stake in its Indian subsidiary by spending nearly USD 350 million. It considers the new investment as a part of its long-term development in the country.
Hon Hai ranks first worldwide in the EMS (electronic manufacturing services) sector with a market share of more than 40 percent.
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