Vedanta Group has announced that it is rejigging its semiconductor business and bringing it under its holding firm, Twin Star Technologies. This move is part of Vedanta's plan to consolidate its semiconductor operations and to focus on growing its business in the global market.
The move comes after the capital market regulator Securities and Exchange Board of India (SEBI) fined metals-to-oil conglomerate Vedanta Ltd Rs 30 lakh for violating the market regulator's disclosure criteria.
The semiconductor business, which is currently called Avanstrate, is based in South Korea and Taiwan. It has manufacturing facilities in both countries and it supplies display glass to major smartphone brands such as Samsung and Apple. The display glass business, which is currently called Avangrid, is based in India and it supplies display glass to major television brands such as Sony and LG.
"The acquisition will be effected by way of a share transfer at face value of Twin Star Technologies Limited's (TSTL) Semiconductor and Display SPVs. TSTL is a wholly owned subsidiary of Volcan Investments Limited, the ultimate holding company of Vedanta Limited," Vedanta said in a statement.
With this restructuring, Vedanta Limited announced the addition of semiconductors and display glass manufacturing ventures to its diversified portfolio.
"Vedanta is committed to making India self-reliant in electronics. This is the beginning of the creation of a Silicon Valley in India, a cutting edge and world class electronics ecosystem. My dream is for every Indian youth to have an affordable smartphone, laptop and an electric vehicle," Vedanta Chairman Anil Agarwal said.
Vedanta said that semiconductor and display glass manufacturing represents a large growth opportunity for India.
The acquisition of the semiconductor and display glass businesses is a significant move by Vedanta. It shows that the company is serious about becoming a major player in the EMS sector. The EMS sector is a rapidly growing market and it is expected to reach $1 trillion by 2025. Vedanta's acquisition of the semiconductor and display glass businesses will give it a strong foothold in this growing market.
It said that the semiconductor market stood at USD 24 billion in 2022 and is estimated to reach USD 80 billion by 2026.
The display panel market is estimated to be worth $7 billion and is expected to grow to $15 billion by 2025. Currently, India imports 100 per cent of these requirements, the statement said.
"We believe that semiconductors and display fab are at the core of any electronics ecosystem. This will also spawn the creation of multiple ancillary industries and opportunities in both downstream and upstream, creating jobs and will be a GDP multiplier," Vedanta's semiconductor and display business global MD Akasrh Hebbar said.
The company said that made-in-India semiconductors and display glass will facilitate affordable electronics -- smartphones, laptops, televisions, and electric vehicles for all Indians.
Vedanta has earlier said that it will invest Rs 1.5 lakh crore in a plant that will start giving revenue by 2027.
"I believe that India can become the next semiconductor hub for the world. It has all the ingredients for success," Vedanta's Semiconductor Business CEO David Reed said.
"This is India's time to become only the 5th country in the world to manufacture display glass. The impact on consumers in terms of affordability of devices will be huge," Display Business CEO Y J Chen said.
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