Vedanta Group in talks with govt to set up display fabrication unit

Vedanta Group is in talks with the government on setting up a display fabrication plant, according to sources in the know.

For Vedanta, led by non-resident Indian billionaire Anil Agarwal, this will be its second attempt to enter the space, following an abortive attempt five years ago when it tried to build a gigantic $10-billion plant in Maharashtra in five phases. For the technology, Vedanta had tied up with LG.

If successful, it will be the first display fabrication facility in the country, putting India on the global map with a select few players.

A display fabrication plant manufactures screens through a complex method which includes sandwiching pieces of glass with transistor cells and using metal alloys and silicon. Such a plant requires a minimum start up investment of over $2-3 billion. The plant assembles the glass with other components required to power the screen. Most such plants also have an assembly unit.

Sources say that the Ministry of Electronics and Information Technology, which has invited global and Indian companies to submit an expression of interest by April end for setting up a plant, had been ‘proactive’ in reaching out to Vedanta, along with other possible contenders. A Vedanta spokesperson declined to comment.

The expression of interest is looking at potential companies manufacturing liquid-crystal display (LCD), organic light-emitting diode (OLED), active-matrix organic light-emitting diode, and quantum dot LED-based displays for TVs, PCs, and mobile devices. A final call will only be taken after the government comes out with a final policy incentivising such large investments.

The government has earmarked about $5 billion to companies as fiscal incentives for items such as display and semiconductor fabrication units, the Internet of things, wearable products, and semiconductor fabless start-ups.

Sources say that Samsung is also setting up a display plant for mobile devices with an investment of $705 million.

This will be its first such plant in India. It has, nonetheless, also been approached by the government to set up an even larger display fabrication unit. A Samsung India spokesperson declined to comment.

According to experts, the technology is held by a handful of companies in China, South Korea, Taiwan, and Japan. China dominates the LCD market with over a 70 per cent share and Chinese firms have invested $50-70 billion.

The premium OLED market is dominated by Samsung and LG but the Chinese have made major investments here too. The other leading players include Chinese companies such as BOE Display and TCL, Taiwanese firms such as Innolux Corporation, and Japanese companies Toshiba and Sharp, among others.

According to estimates, the market for displays in India is pegged at $7 billion, but is expected to more than double to $15 billion by 2025, especially with the expected boost in production and exports of mobile devices, laptops etc.

For instance, estimates suggest that displays account for 25 per cent of the material cost of a mobile device. For LCD and LED television sets, it can be as high as 50 per cent. India currently has only a few assembly plants such as the one owned by Chinese company Holitech, which imports the glass and merely assembles the final product. Business Standard News