Vedanta and Foxconn are investing over Rs.1.54 lakh crore to lay down a display fabrication and semiconductor manufacturing facility in Gujarat. In two years the proposed facility will come up in Prime Minister Narendra Modi's home state, according to the terms of the deal.

The mining giant will be assigned 60 percent stake in the joint venture while the Taiwanese chip maker will own the balance 40 percent. The JV became the fourth to announce plans under the Rs.76,000-crore production-linked incentive (PLI) scheme to foster chip-making capabilities in the country.

In a series of tweets announcing the deal, Vedanta chairman Anil Agarwal said the investment "will help make India's #Atmanirbhar Silicon Valley a reality."

Regarding the MoU as "an important step (in) accelerating India's semiconductor manufacturing ambitions," PM Modi said in a Twitter post that " the investment of Rs.1.54 lakh crore will create a significant impact to boost the economy and jobs. Additionally, a huge ecosystem for ancillary industries will be created and will help our MSMEs."

India's effort towards building a vibrant semiconductor ecosystem is gaining momentum amid the growing move by global electronics majors to diversify supply chains beyond China, where stringent anti-Covid policies remain in force. While the supply shortage that gripped nations in mid-2020 is starting to ease, emerging economies including India are aggressively incentivizing domestic manufacturing of semiconductor chips, including those used in smartphones and other electronic devices.

Vedanta is the fourth - and last - applicant to decide its investment destination under the central government's aggressive incentive-backed proposal. In addition to the Vedanta-Foxconn unit in Gujarat, Karnataka and Tamil Nadu will also house semiconductor fab and display units due to be set up by ISMC Analog and IGSS Ventures in the two states, respectively.

Bangalore-based Rajesh Exports has also announced plans to invest $ 3 billion to set up a fab display unit in Telangana.

Foxconn said that the Centre's active and strong support boosts confidence in setting up a semiconductor factory, adding that the improving infrastructure in the country adds to the positive sentiment.

According to the companies, the Vedanta-Foxconn unit will operate on 28 nanometres (nm) technology nodes, while the display fabrication manufacturing unit will produce Generation eight displays, which cater to small and medium as well as large applications. Of the Rs.1.54 lakh crore proposed investment, Rs.94,500 crore will be used to set up a display fabrication manufacturing unit, while another Rs.60,000 crore will go towards a semiconductor fabrication and outsourced semiconductor assembly and test unit in the planned Gujarat plant.