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Vedanta signs MoUs for $22bn semiconductor manufacturing project in India

19th September 2022

By: Darren Parker

Creamer Media Contributing Editor Online

     

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Indian mining investment company Vedanta has signed two memoranda of understanding (MoUs) with the Indian state of Gujarat to set up a semiconductor fabrication plant – commonly referred to as a fab unit – a display fab unit, and a semiconductor assembling and testing unit in Ahmedabad, in western India. 

This milestone project is expected to attract electronics ecosystem players across the value chain, including manufacturers of sophisticated and sensitive equipment, materials – such as high-purity gases, chemicals, wafers and photomasks – and equipment service providers, besides others.  

The project envisages a total investment of $22-billion and will provide employment to about 100 000 people. 

The decision to set up the project in Gujarat comes after Vedanta and Chinese technology company Foxconn announced in February that they would form a joint venture (JV) company in India.  

Vedanta will hold 60% of the equity in the JV, while Foxconn will own 40%. The JV will look at setting up a semiconductor manufacturing plant in the next two years. 

“Gujarat has been recognised for its industrial development, green energy and smart cities. The improving infrastructure and the government's active and strong support increases confidence in setting up a semiconductor factory,” Foxconn VP Brian Ho said at the signing. 

The proposed semiconductor manufacturing fab unit will operate on the 28 nm technology nodes, while the display manufacturing unit will produce Generation 8 displays catering to small, medium, and large applications. 

“[Gujarat] is well known globally for being a manufacturing hub and I hope that India's upcoming, cutting-edge electronics ecosystem will thrive, with every state benefitting to develop their electronic manufacturing hubs,” Vedanta chairperson Anil Agarwal said.  

The broad plans for a semiconductor unit in India were announced after the Covid-19 pandemic upended global supplies of crucial electronic components used in everything from smartphones to cars. India has vowed to spend $30-billion to overhaul its technology industry and build local chip supply chains to avoid being dependent on foreign producers. 

In Southern Africa, Vedanta is represented by Vedanta Zinc International (VZI). VZI is a grouping of zinc assets located in South Africa, Namibia and Zambia. Black Mountain Mining (BMM) and Gamsberg Mine, both located in the Northern Cape province, represent VZI's South African operations.  

“Vedanta is always open to new investment opportunities such as this one in other international locations like South Africa, Namibia and Zambia in partnership with the government. We are looking forward to leveraging some of the knowledge and resources from India’s JV investment and applying it to the Southern Africa market.  

“Vedanta is committed to all its current and future growth projects in Southern Africa and is continuously looking for investment opportunities that will contribute to the region’s economic success,” VZI executive director and CFO Pushpender Singla said. 

VZI has invested R6.5-billion into Gamsberg Phase I and has created more than 1 000 permanent jobs in South Africa, in addition to a recent R7-billion investment into the expansion of Gamsberg mine and a R650-million investment into the company’s newest iron-ore project at the Black Mountain mining operations. Both projects are expected to create about 1 500 jobs once fully operational.  

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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