Business Today

Foxconn-Vedanta to build chip factory in India

India’s Vedanta Group and Taiwan’s Foxconn will jointly set up a semiconductor chip and electronic display panel factory in Gujarat. They signed an agreement with the Gujarat government last Tuesday in the presence of Union Power Minister Ashwini Vaishnab.

According to Gujarat Chief Minister Bhupendra Patel, the investment figure is 1.54 lakh crore rupees. As a result of this initiative, employment will be created for about one lakh people.

The Gujarat government also claims that this amount of investment is the largest in the history of the corporate sector of independent India. It is going to be India’s first semiconductor chip factory.

Semiconductor chips are needed to make cars, cell phones and other electronic products. But till now these parts are not manufactured in India. It has to be imported from various countries including China, Taiwan, Japan. But over the past two-and-a-half years, the pandemic and the Russia-Ukraine war have hit production and supplies around the world. Indian industry is also in trouble. The country’s automobile industry has repeatedly said that despite the recent increase in demand, cars cannot be supplied as per the demand due to lack of semiconductor chips. In this situation, the central government has taken initiatives to produce chips in India.

On this occasion, Indian Prime Minister Narendra Modi wrote on Twitter that this agreement will speed up India’s semiconductor production plan. An investment of Rs 1.54 lakh crore will boost the economy and create employment; Suitable environment for other related industries will be created. Small, Small and Medium Industries will benefit.
The Gujarat state government said that out of the total investment, Rs 94,000 crore will be spent on setting up display manufacturing units. The remaining 60 thousand crore rupees will be spent on semiconductor factories. Vedanta and Foxconn share 60 and 40 percent respectively.

In the wake of the US-China trade war and Covid, Western countries are looking to overcome their dependence on China. In that case, their preferred place is India. So the Narendra Modi government has set up a fund of $26 billion to attract investors. This money will be spent on a total of 14 industries over the next five years. Meanwhile, South Korea’s Samsung and Taiwan’s Foxconn have increased their mobile phone production in India with the help of this fund. Not only foreign companies, Indian company Ola is taking advantage of this. They have set up a large scooter factory 90 km away from Bangalore city. Their aim is to spread not only in India but all over the world.

In this reality, analysts see this new chip factory as a step to overcome India’s dependence on China. It will speed up the production of cars and technology products in India.