Indian natural resources conglomerate Vedanta will invest in manufacturing 28nm to 65nm semiconductor chips because this is the range for which it sees local demand. AvanStrate, a Japanese glass substrate manufacturer that Vedanta had acquired in 2017, will be spearheading this initiative.
“We are in the perfect place in India to bring the 28 and above nanometer technologies to focus on what India needs right now and for the next few years,” said Akarsh Hebbar, managing director of AvanStrate. “We are running the feasibility on 28 to 65-nanometer range. When we go northwards of 40,000 wafer production a month, we start seeing economies of scale, and so we are trying to do between 40,000 and 80,000 per month.”
Vedanta aims to target the mobile phone, consumer electronics, and automobile sectors. Hebbar said that the plan is to begin construction by the middle or end of this year and enter mass production by 2026.
Expanding to meet a massive demand
Vedanta’s plan to enter this segment comes after the Indian government announced massive incentive schemes to boost semiconductor investment in the country. Several other companies like Tata, have also reportedly expressed interest, while global tech giants like Intel have announced their plans to begin local production.
Vedanta has a diversified business portfolio across metals, mining, oil and gas, and technology. Besides AvanStrate, which makes glass substrate for LCD screens, the company also owns Sterlite Technologies specializing in optical cables and fiber, network design, and software. Hebbar explained that the bigger picture that the company envisions goes beyond semiconductors.
“India is 100 percent dependent on imports for electronic goods, and we want to see that reduce,” Hebbar said. “The most important electronic components in the value chain are glass and semiconductor. We are here to build an electronic cluster of a global electronic manufacturing hub in one place. India needs to start doing that locally because not only are we 25 percent of the world’s population, one of the largest consumers of this electronics, but we are also well placed to build something like this with our current mindset and skillset.
“So, we look at not just semiconductor as something we want to foray into – we want to go into electronics as a whole, which is mother glass, glass fab, panel, and our semiconductor chip.”
Plans to collaborate and create
One of the most daunting aspects of semiconductor chip manufacturing for even the largest global companies is the technology required. Hebbar agreed that building an ecosystem from scratch isn’t easy and Vedanta is keen to collaborate with international partners to achieve this.
“We are willing to collaborate with technology partners,” Hebbar said. “They would be providing us the technology and process. They have years of experience, and we want to copy the exact method right and the setup that they have. We want to expand their know-how and infrastructure to India.”
Building the talent and ecosystem isn’t easy, but Vedanta has plans. They would begin with the supply chain in the short run, for which they have already spoken to several supply chain companies. Some of them are willing to come to India, while others are willing to help import raw materials.
“We have the tax schemes and local logistics, which will be extremely important to mitigate the challenges,” Hebbar said. “And in the long run, we expect to localize the supply chain that will make India the hub of electronics, and that is the cluster we want to build.”
Plans to capture market share
As more companies try to take advantage of the government incentives and the demand, Vedanta may face stiff competition. While acknowledging this, Hebbar said that they focus on the feasibility of the initiative for now.
“Our plans right now are more backed by the feasibility of the entire thing,” Hebbar said. “When we look at glass, we look at about 40,000 to 60,000 panels per month. We’ll look at 40,000 to 80,000 units in semiconductors because that makes sense business feasibility-wise. This captures about 45-50 percent of the market both in display and semiconductors. So having both in place will give us a chance to offer a good supply to the market demand.”
Focus on the local market for now
Demand in the Indian market is expected to remain strong for the foreseeable future, and for now, Vedanta’s focus will remain on customers within the country. The companies they partner with may come with overseas customers and, if that happens, Vedanta may consider serving them once a facility in India is set up.
With so much interest from the government and private sector, India’s journey into semiconductor chip manufacturing may be about to take off. Obviously, there are several challenges on the way, and how companies overcome them would determine their success. Partnerships with major global manufacturers would be an essential part of this. Digi Times