Bombay (awp/afp) – Taiwanese electronics giant Foxconn is to invest $19.4 billion (about 18.7 billion Swiss francs) to manufacture semiconductors in India with local conglomerate Vedanta, as part of New Delhi’s efforts to strengthen its technological autonomy after a global shortage of chips.
Semiconductors are an essential component of nearly every modern electronic device, from smartphones to kitchen appliances and cars, but the coronavirus pandemic has brought global production to its knees and major manufacturers are still struggling to keep up with demand.
In December, India approved a $10 billion incentive package to revive its domestic industry by covering up to half of project costs.
The deal announced on Tuesday is the most ambitious investment to come out of it to date and will see the construction of a factory in Prime Minister Narendra Modi’s home state of Gujarat.
“India’s Silicon Valley is fast approaching,” Vedanta chairman Anil Agarwal tweeted on Tuesday, thanking the government for helping to “close things up so quickly.”
Vedanta, one of India’s largest mining companies, will take a 60% stake in the joint venture for its first step into chip manufacturing. Foxconn, the world’s largest iPhone maker, will take a minority stake.
Vedanta specified that this investment would create 100,000 jobs.
“Improved infrastructure and strong, active support from the government are building confidence in the establishment of a semiconductor factory,” Brian Ho, vice president of Foxconn, said in a statement.
The facilities will be operational by 2024 and will also manufacture screens for phones and tablets, the companies said.
The government’s incentive program for the production of semiconductors has already succeeded in attracting several investors.
The vast majority of the world’s best-performing chips are made by just two companies: TSMC (Taiwan) and Samsung (South Korea), both of which are running at full speed to make up for the current global shortage.
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