Foxconn, the world’s largest contract electronics maker, has announced its withdrawal from a $19.5 billion semiconductor joint venture with Indian conglomerate Vedanta. This setback comes as a blow to Prime Minister Narendra Modi’s chipmaking plans for India. The pact between Foxconn and Vedanta was signed last year, aiming to establish semiconductor and display production plants in Modi’s home state of Gujarat.
In a statement, Foxconn stated that it will not proceed with the joint venture with Vedanta. The electronics maker did not provide further details regarding the reasons behind this decision. After working together for over a year to bring their semiconductor idea to reality, both companies mutually agreed to terminate the joint venture. As a result, Foxconn will remove its name from the project, which now becomes a fully-owned entity of Vedanta.
Modi has placed great emphasis on chipmaking as a crucial component of India’s economic strategy, aiming to propel the country into a “new era” of electronic manufacturing. Therefore, Foxconn’s withdrawal represents a setback to his ambitions of attracting foreign investors to produce chips locally for the first time. As of now, Vedanta has not responded to requests for comments on this matter.
Foxconn is predominantly known for assembling Apple products such as iPhones. However, in recent years, the company has been diversifying its business into chip manufacturing. Previous reports by Reuters indicated that Modi’s plan was facing challenges, with the Vedanta-Foxconn project progressing slowly as negotiations to involve European chipmaker STMicroelectronics as a partner reached an impasse.
While Vedanta-Foxconn managed to secure STMicro for licensing technology, the Indian government expressed its desire for the European company to have a more significant stake in the partnership. STMicro showed reluctance towards this condition, leading to the talks being left hanging. India, expecting its semiconductor market to reach a value of $63 billion by 2026, received three applications for manufacturing plants under a $10 billion incentive scheme.
These applications came from the Vedanta-Foxconn joint venture, a global consortium ISMC with Tower Semiconductor as a tech partner, and Singapore-based IGSS Ventures. However, the $3 billion ISMC project faced delays due to Intel’s acquisition of Tower Semiconductor, while the $3 billion plan by IGSS was put on hold as the company sought to re-submit its application.
This news piece was reported by Munsif Vengattil in Bengaluru, Ben Blanchard in Taipei, and Aditya Kalra in New Delhi. The editing was conducted by Louise Heavens, Jason Neely, and Alexander Smith.
Credit: The Star : Tech Feed
