Vedanta acquires Japan's AvanStrate, buys additional stake for $78 million

With this acquisition, Vedanta’s total holding in AvanStrate has risen to 98.2%. The transaction is expected to be completed by June 2024.

Vedanta plans to leverage the Tokyo-based company’s technology and manufacturing capabilities to establish its own display fabrication unit in Gujarat. The aim is to meet both Indian and global demand for electronic devices, while also fostering a local hi-tech electronics manufacturing industry.

“As a wholly-owned subsidiary, AvanStrate will serve as a strategic asset for Vedanta as the conglomerate looks at playing a critical role in India’s journey towards becoming self-reliant in electronics manufacturing,” said Akarsh Hebbar, global managing director, AvanStrate Inc.

In 2017, Cairn India Holdings had acquired a 51.63% stake in AvanStrate.

AvanStrate produces glass substrates for Gen 4 to Gen 8 TFT LCD (thin-film-transistor liquid-crystal display) panels, which are primarily used in electronic devices such as televisions, laptops, smartphones, tablets, wearables, and other displays including automotive and medical equipment.

The company boasts more than 700 patents, production facilities in Taiwan and Korea, a robust supply chain network, and partnerships with global technology companies.

In the statement, Vedanta said the acquisition of AvanStrate aligns with its vision of pivoting towards technology and diversifying into hi-tech manufacturing. Vedanta intends to leverage AvanStrate’s technological expertise in display glass to create local supply chains.

“India currently relies heavily on imports from China to meet its display requirements. With AvanStrate’s expertise, Vedanta is strategically positioned to establish India’s first integrated fab for display glass and panels, catering comprehensively to the fast-growing electronics manufacturing industry,” the company said in the statement.

“Such a facility can significantly elevate domestic value addition in electronics manufacturing, escalating it from the current 15% to an impressive 60%,” it added.

Vedanta’s manufacturing ambitions

In 2022, Vedanta announced plans to establish India’s first integrated fab for display glass and panels. 

In July 2023, Hebbar had said that Vedanta had tied up with technology and equity partners for its semiconductor fabrication project, and with Taiwan-based Innolux for its display fab unit.

Around the same time, chairman Anil Agarwal had told Mint that the Vedanta group would invest $5 billion in the first phase of setting up a semiconductor fabrication unit, a semiconductor packaging and testing unit, and a display fabrication unit in the Dholera Special Investment Region in Ahmedabad district of Gujarat.

Vedanta announced its $20 billion ( ₹1.54 trillion) investment plan for these projects, with the display fab unit entailing an investment of ₹94,500 crore and the integrated semiconductor fab unit and OSAT facility requiring ₹60,000 crore.

In February 2022, Vedanta had announced a joint venture (JV), Vedanta Foxconn Semiconductor Ltd, with Taiwanese contract manufacturer Foxconn Technology Group, the world’s largest, to set up India’s first semiconductor manufacturing unit under the $10 billion government-backed financial incentive scheme.

The JV ended in July 2023, with both parties taking individual routes to set up their own chip fabs.

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Published: 10 May 2024, 07:43 PM IST