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Vedanta’s semiconductor project faltering as unable to find technology partner

The government has put Vedanta Group’s proposal for setting up the much-touted mega semiconductor fab plant on the back burner due to the company’s inability to rope in a technology partner.

Instead, it is considering two new fab proposals, one of which is “very credible” and another, which is also on the pipeline. However, their names have not been disclosed. The vedanta Group’s joint venture (JV) with leading technology service provider, Foxconn, fell through last year.

When asked about the fate of Vedanta’s mega fab proposal, the minister of state for electronics and information technology, Rajeev Chandrasekhar, said: “They (Vedanta) have not submitted any new proposal after the Vedanta -Foxconn breakup. They submitted another proposal but they have not pushed it and we do not consider it a serious proposal, as they do not have a technology partner.” Summing up the progress and the problems in the government’s tryst with semi conductors after the Semicon policy was announced, Chandrasekhar said: “After the hiccups in the first one to one-and-a-half years, mainly because of the Vedanta proposal and the extraordinary time we spent on that, hoping it will come to fruition, certainly after the Micron plant was approved and has gone into implementation mode, it has given a significant uptick to new proposals that are coming up.”

A Vedanta spokesperson said, “Vedanta is fully committed to its semiconductor fab project. We have a team of global experts and have redoubled our efforts to fulfil our government’s vision of making India an electronic manufacturing hub, where it plays a pivotal role in the global semi-conductor supply chain.” Even Foxconn, in its public statement after its break up with Vedanta, had said that it would continue to try and set up a fab plant in India. There have been discussions with the government for a possible compound fab unit.

However, asked whether any actual proposal is on the table, Chandrasekhar clarified, “Foxconn is in a packaging proposal with a partner. But on compound fab, they have not talked to us and there is no application on the table.”

A query to Foxconn did not elicit any response.

Chandrasekhar added that the government has a proposal for a large and credible fab plant which will be announced shortly, and another one is in the pipeline. It is also considering proposals for three compound semiconductor plants and three packaging (OSAT) proposals as well.

In the interim Budget the government has earmarked over Rs 6,000 crore for the semicon subsidy scheme in FY25. Chandrasekhar said that prima facie, this amount may not be enough as some big projects could be announced this year. The ministry could go back and ask for more from the $10 billion earmarked under the Semicon India Programme.

The Vedanta–Foxconn fab project had envisaged an investment of over Rs 1.5 lakh crore, wherein the government would have given 50 per cent of the cost of the project. It was also expected that states like Gujarat (the JV had chosen Dholera as the site for the plant) would offer around 20 per cent of the investment cost through various means. Business Standard

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