Anil Agarwal's Vedanta company has declared that it will invest up to INR 60,000 crore over the next three years to create up an advanced chip and glass manufacturing ecosystem in India, just days after the government announced a massive incentive package to attract semiconductor investments.

It's also finalising technological and equity collaborations, as well as joint ventures, with some of the world's leading fabrication companies. This is Agarwal's second attempt to entice semiconductor companies to invest in India. The new charge will be headed by AvanStrate, a Japanese glass substrate producer that Vedanta purchased from the Carlyle Group in December 2017.

AvanStrate's managing director, Akarsh Hebbar said, “we are in the last stages of negotiations with various state governments for setting up a factory that would require between 250 acres and 400 acres. Overall investments into the project will range between $6 billion (Rs 45,000 crore) and $8 billion (Rs 60,000 crore) in the first two phases, following which we will carry out further assessment of the market for expansion.”

AvanStrate is in negotiations with the governments of Haryana, Telangana, Tamil Nadu, Gujarat, Maharashtra, and Karnataka about establishing a plant and receiving incentives, according to Hebbar. He further said, “we are hoping to get an additional 10-15% capital investment support from the state where we invest, apart from the central government’s subsidy.” Apart from an LCD module plant, Hebbar said the investments will be for large facilities for display glass and fabrication chips, and that the company is in talks with top global semiconductor manufacturers such as Taiwanese makers TSMC, United Microelectronics Corp., and Foxconn, as well as Korean LG and Samsung, and Japanese Sharp.

The discussions might lead to technical alliances or a joint venture with pooled stock stakes. He underlined, “we intend to finalise our plans over the next couple of months.” Hebbar stated that the Vedanta Group and its chairman Agarwal are optimistic about the semiconductor industry's prospects in India, particularly in light of high demand from the consumer electronics, car, and associated industries.

Despite being a substantial consumer market for semiconductor-based sectors, India lacks a chip manufacturing ecosystem and relies primarily on expensive imports. “The funding from our group’s side will be through equity and debt, apart from potential partnerships,” according to Hebbar, over 80% of output will be used for domestic consumption, with the remainder going to international markets.