Aatmanirbhar Silicon Valley dreams to turn to reality: Why India’s first chip factory in Gujarat is reason to celebrate
Vedanta and Taiwan’s Foxconn will invest Rs 1.54 lakh crore to set up the 1,000-acre semiconductor plant in Ahmedabad. The factory, which is expected to start production in two years, will not only employ more than one lakh people but also accelerate India’s manufacturing ambitions
Multinational mining company Vedanta Limited and Taiwanese electronics manufacturing giant Foxconn on Tuesday announced that it would be investing Rs 1.54 lakh crore to set up India’s first semiconductor production plant in Gujarat — Prime Minister Narendra Modi’s home state.
The two companies also signed a memorandum of understanding with the Gujarat government to set up the unit in the state. The MoU was signed in the presence of Minister for Railways, Communications, Electronics & Information Technology, Ashwini Vaishnaw, at a function held in Gandhinagar.
History gets made! 🇮🇳 Happy to announce that the new Vedanta-Foxconn semiconductor plant will be set up in #Gujarat. Vedanta’s landmark investment of ₹1.54 lakh crores will help make India’s #Atmanirbhar Silicon Valley a reality. (1/4)
— Anil Agarwal (@AnilAgarwal_Ved) September 13, 2022
Shortly after signing the MoU, Vedanta Resources founder and chairman Anil Agarwal said India’s own Silicon Valley is a step closer now. “#India will fulfil the digital needs of not just her people, but also those from across the seas. The journey from being a chip taker to a chip maker has officially begun…Jai Hind!”
We examine why this new plant is a reason to celebrate and how it will help the nation.
What are semiconductor chips?
First things first: semiconductors are the prominent component that powers electronic items that exist in our surroundings. Usually made of silicon, the electricity can be controlled using semiconductor chips in various electronic items like our cars, laptops, smartphones, refrigerators etc.
These chips play a crucial part in the functioning of all modern electronics and information and communications technology products. In simple terms, they can be considered as basic building block parts of contemporary automobiles, household gadgets and essential medical devices such as ECG machines.
Eight per cent of all the chips used in the world are manufactured in Taiwan, followed by China and Japan.
As of now, semiconductor chips are not manufactured in India at present.
All about the new semiconductor plant
The Rs 1.54 lakh crore investment by Vedanta and Foxconn will be used to set up India’s first semiconductor production plant, a display fab unit, and a semiconductor assembling and testing unit.
Out of the total investment of Rs 1.54 lakh crore, Rs 94,000 crore will go into setting up the display manufacturing unit while Rs 60,000 crore will be invested for the semiconductor manufacturing facility.
According to officials, the plants will be set up on a 1, 000-acre land in Ahmedabad. Speaking on the deal, Vedanta chairma Anil Agarwal was quoted as telling news agency PTI that the plant would start production in two years.
Agarwal further added that the plant would generate one lakh jobs. “We are trying to ensure that production gets underway within two years. This isn’t just about one lakh jobs, we are transforming the nation. The country will enter (field of) semiconductors and glass. But I can’t even imagine what doors will this open once production begins.”
According to Gujarat Science and Technology Department Secretary Vijay Nehra the deal is the biggest ever corporate investment in the history of independent India.
Reacting to the MoU, Prime Minister Narendra Modi said that the MoU is an important step accelerating India’s semi-conductor manufacturing ambitions.
This MoU is an important step accelerating India’s semi-conductor manufacturing ambitions. The investment of Rs 1.54 lakh crore will create a significant impact to boost economy and jobs. This will also create a huge ecosystem for ancillary industries and help our MSMEs. https://t.co/nrRbfKoetd
— Narendra Modi (@narendramodi) September 13, 2022
Politics over the plant
Following the announcement of the new semiconductor plant, the Opposition in Maharashtra slammed the Eknath Shinde-led government for the state “losing” out on the Rs 1.54 lakh crore venture.
Shiv Sena leader Aaditya Thackeray claimed that the former Chief Minister Uddhav Thackeray-led Maha Vikas Aghadi (MVA) government had brought and finalised the deal for the state. However, the Shinde-Fadnavis government let it go to Gujarat, which caused not only a loss of a $20 billion semiconductor project to the state but also 170 allied industries and about one lakh jobs, reports The Hindu.
It was almost decided that the plant will come up in Maharashtra, said Aaditya Thackeray. “Our MVA government had brought this to final stage. The current dispensation has lost the confidence of potential investors, hence such mega projects are not coming here,” he added.
वेदांतचा प्रोजेक्ट गुजरातला गेल्याचे समजले. वेदांतला आणि गुजरातला माझ्या शुभेच्छा आहेत. आपल्या देशात एवढा मोठा प्रोजेक्ट येणे, हे चांगलेच आहे. या प्रोजेक्टसाठी आम्ही गेल्या वर्षभरात अनेक बैठका घेऊन, भेटीगाठी करून पुण्याजवळ हा प्रोजेक्ट येईल, या हेतूने काम करत होतो. pic.twitter.com/ipBwOWLKvW
— Aaditya Thackeray (@AUThackeray) September 13, 2022
State Nationalist Congress Party (NCP) president and former minister Jayant Patil said with the big-ticket project slipping away from the hands of Maharashtra, the state has lost an investment potential of more than Rs one lakh crore.
“Gujarat has once again taken away the morsel from Maharashtra’s mouth. With the Gujarat elections coming up, the BJP in Maharashtra seems busy in safeguarding the interests of Gujarat, NCP leader Patil said in a series of tweets.
Will chief minister and deputy chief minister (Devendra Fadnavis) apologise to the educated unemployed youth of the state for losing out on the project? he asked.
With inputs from agencies
The industry is also wary about the decrease in demand from China market, due to two year long lull.<br />
Executive chairman of Vedanta group said that the government should utilise India's vast natural resources for faster economic growth.
Forbes estimated that the 61-year-old Indian entrepreneur has a net worth of $3.5 billion.<br />