Anil Agarwal’s plans to set up chip-making plant at risk as hurdles mount.

Billionaire Anil Agarwal’s plan to build a $19-billion chipmaking plant in the country is floundering as his venture struggles to secure a technology partner and faces challenges in obtaining financial incentives from the government.

Seven months after Agarwal announced a chip partnership between his Vedanta Resources Ltd. and Taiwan’s Hon Hai Precision Industry Co., the venture is yet to tie up with a fabrication unit operator or license manufacturing-grade technology, people familiar with the matter said. One of those is required for the venture to receive the significant financial incentives the government has pledged for such projects.

The venture’s difficulties highlight how hard it is to set up new semiconductor plants, massive complexes that cost billions to construct and require very specialised expertise to run. Metals and mining group Vedanta and iPhone assembler Hon Hai have no significant chipmaking experience, yet they’re among the first to try to take advantage of India’s ambition to build a semiconductor industry.

HBL