Vedanta Group eyes $3.5 billion turnover from chip business, one-third from exports

Vedanta Group expects its semiconductor business turnover to be in the range of $3 to 3.5 billion out of which around $1 billion will come from exports, a senior official of the company said.

Vedanta Group's global managing director of display and semiconductor business Akarsh Hebbar told PTI that its JV partner Foxconn has all the agreements and required technologies in place to start making electronic chips.

Vedanta Foxconn JV is among three companies that have applied for setting up semiconductor manufacturing units in the country. Vedanta has also applied for setting up a display fabrication plant to make screens that are used for display in electronic devices.

"We expect our turnover to be in the range of $3-3.5 billion in the first phase which is by 2026-27. This will be from both display and semiconductor combined. At that time we expect $1 billion to come from exports," Hebbar told PTI.

Vedanta Group has earmarked investments of up to $20 billion for semiconductor business, and it plans to invest $15 billion in the first 10 years.

This is the second attempt of Vedanta Group to enter into the semiconductor business. Earlier the company had announced plans to foray into the segment in 2015-16 with $10 billion to set up a display fab unit but it could not get government's approval.

Later, Vedanta acquired Taiwan-based Avanstrate to enter into display fab manufacturing.

The company has now formed a JV with electronics manufacturing giant Foxconn to set up an electronic chip manufacturing plant.

"Foxconn is running four foundries themselves. They purchase $30-40 billion worth of semiconductors. The reason we don't see it is because the S group is a very small subsidiary of Foxconn compared to the whole of Foxconn. They are going to bring this ecosystem here. Foxconn is a fully integrated unit that can bring IPs (Intellectual Properties) required to make 28 nanometer technology," Hebbar said.

He said India's vision is to make 1 billion smartphones by 2030, 15 million televisions and 24 million notebooks per year by 2030 only for local consumption.

"Our target is towards local consumption. We will keep 10 per cent of display for exports and 20-25 per cent in semiconductor for exports. Majorly we will make it for India," Hebbar said.

The company expects to start manufacturing display units in 2024-25 and semiconductors by 2025-26.

Vedanta will look at making a 28 nanometer (nm) chipset.

Hebbar said: "28 nm is tried and tested technology. The operational efficiency that it is coming with and the operational model that we are building around this efficiency makes it look like we are going to make affordable chipsets in our country for people to have good business value. Our business structure is robust even without subsidy."

Vedanta group will look at manufacturing 40,000 panels of semiconductor and 60,000 panels of display per month, he said.

The company's application is under evaluation by the government. Minister for electronics and IT Ashwini Vaishnaw has said that the government will start clearing applications in the current calendar year.

Hebbar said 20-30 per cent of the production capacity is likely to be absorbed by Foxconn itself and the company is also in discussion with smartphone makers for business.

The government has also assured semiconductor companies of giving policy support besides fiscal incentives to ensure a sustainable market for them.