Apple's Foxconn will collaborate with Vedanta Ltd.

Foxconn announced on Monday that it had collaborated with Indian conglomerate Vedanta Ltd to produce semiconductors in India, as the electronics behemoth seeks to diversify its operations amid a global chip scarcity.

In recent years, Foxconn, the world’s largest contract electronics maker and a key Apple supplier, has moved into new fields such as electric vehicles (EVs) and semiconductors.

Foxconn stated in a statement that it has signed a memorandum of understanding with Vedanta, an oil-to-metals company, to create semiconductors, calling it “a substantial boost to domestic electronics manufacturing in India.”

Foxconn said it would spend $118.7 million in a joint venture with Vedanta, which would be the new firm’s primary stakeholder. It was also stated that Foxconn would own 40% of the venture’s shares.

According to the announcement, “this first-of-its-kind collaborative venture between the two firms would promote Indian Prime Minister Narendra Modi’s aim of creating an ecosystem for semiconductor production in India.”

Following a global chip scarcity that has wracked manufacturers of everything from autos to gadgets, the Taiwanese company struck a collaboration with Yageo Corp to build semiconductor chips last year.

In recent years, the business has stated that it intends to become a key player in the global electric vehicle market, and that it is in talks with “associated foundries” about collaborating on EV chip development.

The Taiwan company has in recent years counted semiconductors among its core businesses and last year formed a partnership with Yageo to make semiconductor chips, following a global chip shortage that has rattled producers of goods from cars to electronics.