Vedanta Group News: Vedanta Group Eyes $3.5 Billion Revenue in Chip Business, One-Third from Export
Vedanta Foxconn JV is among the three companies that have applied for the establishment of semiconductor manufacturing units in the country. Vedanta also requested the establishment of a screen manufacturing plant to manufacture screens used for display in electronic devices.
“We expect our revenue to be in the range of $3-3.5 billion in the first phase which is by 2026-27. This will come from both display and semiconductors combined. At that time, we expect $1 billion to come from exports,” Hebbar said.
The Vedanta Group has planned investments of up to $20 billion for the semiconductor industry and plans to invest $15 billion in the first 10 years.
This is Vedanta Group’s second attempt to enter the semiconductor business. Earlier, the company announced plans to foray into the segment in 2015-16 with $10 billion to set up a display production unit, but it was unable to secure government approval.
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Later, Vedanta acquired the Taiwanese company Avanstrate to start manufacturing displays.
The company has now formed a joint venture with electronics manufacturing giant Foxconn to set up a microchip manufacturing plant.
“Foxconn itself runs four foundries. They buy $30 billion to $40 billion worth of semiconductors. The reason we don’t see it is because Group S is a very small subsidiary of Foxconn compared to to all of Foxconn. They’re going to bring that ecosystem here. Foxconn is a fully integrated unit that can bring the IPs (intellectual properties) needed to make 28-nanometer technology,” Hebbar said.
He said India’s vision is to manufacture 1 billion smartphones by 2030, 15 million televisions and 24 million laptops per year by 2030 for local consumption only.
“Our target is local consumption. We will keep 10% of display for export and 20-25% of semiconductor for export. We will do this mainly for India,” Hebbar said.
The company plans to start manufacturing display units in 2024-25 and semiconductors by 2025-26.
Vedanta will seek to manufacture a 28 nanometer (nm) chipset.
Hebbar said, “28nm is a proven technology. The operational efficiency that comes with it and the operational model we’re building around that efficiency makes it look like we’re going to make affordable chipsets in our country so people have good business value. Our business structure is strong even without subsidy.”
Vedanta Group will plan to manufacture 40,000 semiconductor panels and 60,000 display panels per month, he said.
The company’s candidacy is currently being assessed by the government. Electronics and IT Minister Ashwini Vaishnaw said the government would start processing applications in the current calendar year.
Hebbar said 20-30% of production capacity will likely be taken up by Foxconn itself, and the company is also in talks with enterprise smartphone makers.
The government has also assured semiconductor companies to provide policy support in addition to tax incentives to ensure a sustainable market for them.