Foxconn and Vedanta have announced $19.5bn (£16.9) to build one of the first chipmaking factories in India.
The Taiwanese firm and the Indian mining giant are tying up as the government pushes to boost chip manufacturing in the country.
Prime Minister Narendra Modi's government announced a $10bn package last year to attract investors.
The facility, which will be built in Mr Modi's home state of Gujarat, has been promised incentives.
Vedanta's chairman Anil Agarwal said they were still on the lookout for a site - about 400 acres of land - close to Gujarat's capital, Ahmedabad.
But both Indian and foreign firms have struggled in the past to acquire large tracts of land for projects. And experts say that despite Mr Modi's signature 'Make in India' policy - designed to attract global manufacturers - challenges remain when it comes to navigating the country's red tape.
Gujarat Chief Minister Bhupendrabhai Patel, however, said the project "will be met with red carpet... instead of any red tapism".
The project is expected to create 100,000 jobs in the state, which is headed for elections in December, where the BJP is facing stiff competition from oppositions parties.
According to the Memorandum of Understanding, the facility is expected to start manufacturing chips within two years.
"India's own Silicon Valley is a step closer now," Mr Agarwal said in a tweet.
India has vowed to spend $30bn to overhaul its tech industry. The government said it will also expand incentives beyond the initial $10 billion for chipmakers in order to become less reliant on chip producers in places like Taiwan, the US and China.
"Gujarat has been recognized for its industrial development, green energy, and smart cities. The improving infrastructure and the government's active and strong support increases confidence in setting up a semiconductor factory," according to Brian Ho, a vice president of Foxconn Semiconductor Group.
Foxconn is the technical partner. Vedanta is financing the project as it looks to diversify its investments into the tech sector.
Vedanta is the third company to announce plans to build a chip plant in India. A partnership between ISMC and Singapore-based IGSS Ventures also said it had signed deals to build semiconductor plants in the country over the next five years.
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