Vedanta seeks free land, cheap water, power in race to be India’s first chipmaker

In the race to become India’s first chip maker, Vedanta Ltd is seeking 1,000 acres (405 ha) of free land from states and other incentives for $20 billion in semiconductor and display manufacturing, sources told Reuters.

The oil-to-metal conglomerate said in February that it would diversify into chip manufacturing and announced plans to form a joint venture with Taiwan’s Foxconn to support Prime Minister Narendra Modi’s plans to make India a semiconductor manufacturing hub. Of.

While Vedanta is seeking federal incentives under the Modi program offering financial assistance, it is separately seeking 1,000 acres of land on lease for 99 years from states for free, according to two sources with direct knowledge. .

It needs 700 acres for its own facility and the rest for ancillary units.

The first source said Vedanta has told state governments that its operations will help them generate $2.2 billion in tax revenue over 20 years and create 100,000 direct and indirect jobs.

The company is in the advanced stage of reviewing proposals from at least three Indian states, Telangana and Karnataka in the south and Maharashtra in the west.

Vedanta did not respond to a request for comment. Representatives of the IT and Industries Department in the three states did not immediately respond.

More corporations and nation states, including India, are looking for ways to have seamless access to the chips, which are at the core of many important future technologies such as artificial intelligence and 5G.

Most of the world’s chip production is limited to a few countries such as Taiwan and the United States. India, though a late entrant, is now actively wooing companies, saying in December it wants to “start a new era in electronics manufacturing.”

The government says that from $15 billion in 2020, the Indian semiconductor market is projected to reach $63 billion by 2026.

Chip plants generally consume huge amounts of electricity and water and their erratic supply is often related to industry in India.

Sources said Vedanta is seeking water and electricity at subsidized and fixed prices for a period of 20 years, as part of the plea of ​​the states.

The first source said that Vedanta expects its plants to eventually consume around 40 million liters of water per day. This would roughly be the amount of water needed for a city with more than 300,000 people, according to the benchmark suggested by the Indian government for urban water supply.

Separately, while Modi’s federal plan may offer 50% financing support on the project’s capital expenditure, Vedanta is seeking additional incentives from states, the source said.

India, hoping to attract more global investments in space, will hold a three-day Semiconductor Conference which will be inaugurated by Modi in its southern tech hub Bengaluru from Friday.

Singapore’s IGSS Ventures and ISMC, a joint venture between Abu Dhabi-based Next Orbit Ventures and Israel’s Tower Semiconductor, have also sought federal incentives under Modi’s program.

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