Vedanta's Plan to Launch First Made-in-India Chip in 2.5 Years : Anil Agarwal

Vedanta's Confirmed Timeline for Made-in-India Chips

Vedanta's Chairman, Anil Agarwal, has provided assurance that the company's first indigenous chips will be introduced within the next 2.5 years. The semiconductor manufacturing project is well underway, with a technology partner already identified.

This significant step is in line with Vedanta's commitment to establish a semiconductor fab and a display unit in India, contributing to the country's self-reliance in chip manufacturing.

Progressing Despite Initial Hurdles

Vedanta's ambition to set up a semiconductor fab faced initial challenges when the government returned an earlier proposal due to the absence of a technology partner. However, the company has since made strides in securing the necessary collaborations.

Notably, Vedanta has been inking memoranda of understanding with international firms like STMicroelectronics. To align with government requirements, Vedanta has also sought veteran chip technology players to invest as joint venture partners.

Finding the Right Technology Partner

An essential aspect of Vedanta's semiconductor venture is the identification of a suitable technology partner. Anil Agarwal has confirmed that the company has found the right partner and is currently in the process of formalizing the collaboration.

This partnership is crucial for leveraging technical expertise and accelerating the establishment of the chip manufacturing unit.

Addressing Concerns About Financial Capability

Some industry experts have raised concerns about Vedanta's financial capacity to undertake such an ambitious project. However, Anil Agarwal reassured stakeholders that the company possesses sufficient cash flow and has a queue of potential equity and debt investors.

Vedanta is keen on establishing strong partnerships and building a robust ecosystem before proceeding with the project, countering criticisms about its financial capabilities.

Investment and Phase-wise Approach

Vedanta's semiconductor project will involve a total investment of $20 billion. The first phase will require $5 billion investment, with the subsequent phases likely to be executed in a phased manner.

The company's strategic approach ensures prudent capital allocation and paves the way for steady progress in India's semiconductor manufacturing landscape.

India's Efforts to Attract Major Semiconductor Players

India's semiconductor industry is witnessing significant efforts to attract major players in chip fabrication and assembling. A $10 billion subsidy program aims to entice semiconductor giants to set up plants in the country.

During Prime Minister Modi's visit to the US, Micron, a prominent semiconductor company, committed to investing $2.7 billion in an assembling plant in India. Additionally, Applied Materials, a renowned semiconductor equipment manufacturer, pledged $400 million to design chip-making machinery in the country.

Challenges in Attracting Foreign Foundries

While India's initiatives to promote semiconductor manufacturing are commendable, attracting foreign foundries remains a challenge.

Advanced economies like the US, Germany, the European Union, and Japan have also introduced substantial subsidy programs, sparking a global race to secure a share of the semiconductor market.

India's proactive measures seek to position the country as a competitive player in the global semiconductor arena.