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HomeBusinessBillionaire Anil Agarwal’s chip dreams stymied as India set to deny funding.

Billionaire Anil Agarwal’s chip dreams stymied as India set to deny funding.

Anil Agarwal, a billionaire, is planning to invest $19 billion in a chip company, but the Indian government is about to withhold critical money from him.

According to people with knowledge of the situation, the government is likely to inform the joint venture between Agarwal’s Vedanta Resources Ltd. and Taiwan’s Hon Hai Precision Industry Co. that it won’t receive incentives to produce 28-nanometer chips. The business endeavour applied for this help, which might be worth billions of dollars, but it didn’t meet the requirements.

While Vedanta and Hon Hai may reapply, Agarwal’s desire to launch India’s first significant chip making business would be delayed, even as his metals and mining company works to lower a hefty debt load.

Also read, Indian economy showed resilience, but recovery from Covid pandemic shock not complete: RBI report

Why India denied funding to Anil Agarwal?

The initiative hasn’t found a technology partner or obtained a manufacturing-grade technical licence for the 28nm chips it was looking to develop nine months after Anil Agarwal launched the chip cooperation to create India’s “own Silicon Valley,” the sources claimed. To receive government funding, the endeavour must complete at least one of those steps.

Vedanta and Hon Hai, the company that assembles the majority of the world’s iPhones, have no prior noteworthy expertise in chip manufacturing. Their inability to locate technology that is ready for production serves as a stark reminder of how challenging it is to put up brand-new semiconductor factories, which are enormous complexes that cost billions to construct and operate.

A Vedanta representative stated that the business was awaiting the outcome of the government’s decision on its application. An email asking Hon Hai, also known as Foxconn, for comment received no response.

To attract foreign chipmakers to India, Prime Minister Narendra Modi has promised to invest $10 billion and vowed that his administration will pay for half the cost of establishing all semiconductor plants.

In the past, Vedanta claimed that Hon Hai, a partner, had acquired “production-grade, high-volume” 40nm technology as well as “development-grade” technology for the comparatively more complex 28nm circuits. According to the sources, that is probably insufficient for the government to grant the funds because the venture applied to actually create 28nm chips. As per sources, Anil Agarwal and team are still trying to get the government funding.

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