Vedanta-Foxconn Sign Deal With Gujarat For $20 Billion Chip Foray

Vedanta Ltd and Taiwan's Foxconn signed an agreement on Tuesday with India's Gujarat, Prime Minister Narendra Modi's home state, to set up a $20 billion semiconductor project.

Reuters was first to report on Monday that the joint venture obtained subsidies including on capital expenditure and electricity from Gujarat.

They plan to build a chip and display facilities near the western state's largest city, Ahmedabad.

Gujarat Chief Minister Bhupendrabhai Patel said the venture would create more than 100,000 jobs, and the state was prepared to extend any support to the project, which it won in a close race with India's richest state, Maharashtra.

Foxconn is acting as the technical partner, while oil-to-metals conglomerate Vedanta is financing the project as it looks to diversify into chip manufacturing.

The Indian government has said it will expand incentives beyond an initial $10 billion plan for those investing in semiconductor manufacturing, as it aims to become a key player in the global supply chain for chips.

Vedanta is the third company to announce a chip plant location in India after international consortium ISMC and Singapore-based IGSS Ventures, which are setting up in the southern states Karnataka and Tamil Nadu, respectively.