Mining major Vedanta and Hon Hai Technology Group, better known as Foxconn, which is the world's largest electronics manufacturing company, have collaborated to manufacture semiconductors in India, as the government opens the PLI (performance-linked incentive) scheme to locally manufacture chips in the country.
This first-of-its-kind joint venture between the two companies will support Prime Minister Narendra Modi's vision to create an ecosystem for semiconductor manufacturing in the country, the companies said in a statement.
According to the MoU, Vedanta will hold the majority of the equity in the JV, while Foxconn will be the minority shareholder.
Vedanta Chairman Anil Agarwal will be the Chairman of the joint venture company.
The targeted project plans to invest in manufacturing semiconductors. It will provide a significant boost to domestic manufacturing of electronics in India.
"Discussions are currently ongoing with a few state governments to finalise the location of the plant," said Foxconn.
The government recently approved an outlay of Rs 76,000 crore ($10 billion) for the development of semiconductors and display manufacturing ecosystem.
The PLI and other schemes to boost semiconductors will not only help domestic companies to overcome the challenges posed by COVID-19 but also assist them to become globally competitive, especially in chip making, it added.
Semiconductors are an integral part of modern technology used in automobiles and its components, electronic and medical devices.
The Vedanta-Foxconn is the first joint venture in the electronics manufacturing space after the announcement of the policy.
The government had notified the National Policy on Electronics 2019 (NPE 2019) scheme to position India as a global hub for Electronics System Design and Manufacturing (ESDM) by encouraging and driving capabilities in the country for developing core components, including chipsets.
(With inputs from IANS)