Gujarat government and Vedanta group sign MoU to set up semiconductor unit

 The Gujarat government and mining giant Vedanta group have signed a memorandum of understanding (MoU) as a part of which the company will invest more than Rs 1.54 lakh crore in the state to set up a semiconductor and display fabrication unit, the state government said in a statement on Tuesday.

“The proposed semiconductor manufacturing fab unit will operate on the 28nm technology nodes with wafer size 300 mm; and the display manufacturing unit will produce Generation 8 displays catering to small, medium and large applications,” a joint statement released on Tuesday read.

The union minister for electronics and information technology Ashwini Vaishnaw was also present in Gandhinagar at the signing of the MoU, along with the state’s chief minister Bhupendrabhai Patel and the minister for education, science and technology Jitubhai Vaghani.

Of the Rs 1.54 lakh crore investment, Rs 94,500 crore will be used to set up a display fabrication manufacturing unit, while another Rs 60,000 crore will be invested in the state to manufacture a semiconductor fabrication and outsourced semiconductor assembly and test (OSAT) unit.

ET had on Monday reported that the Vedanta-Foxconn JV was likely to pick Gujarat as its home state for setting up semiconductor and display fabrication units. The JV was in talks with other states such as Maharashtra as well. Sources had told ET that Maharashtra lost out at the last moment as it did not agree to some of the incentives being demanded by the two companies.

Vedanta is the third - and the last - applicant to decide its investment destination under the central government’s Rs 78,000 crore semiconductor manufacturing incentive scheme to create a semiconductor ecosystem in the country.

As of now, Gujarat, Karnataka and Tamil Nadu would play host to the semiconductor fab and display units to be set up by the three applicants - Vedanta Foxconn, ISMC Analog, and IGSS Ventures.

The semiconductor manufacturing scheme has triggered intense competition among the rival states, each sending large teams regularly to meet with company representatives and lobby for their states.

A senior executive of one of the applicant companies told ET: “It’s obvious that the states fought a tough war to bag these investments. One only has to look at Taiwan to know what semiconductors can do to a nation”.

Source:Economic times