Taiwan-based Hon Hai Technology Group, commonly known as Foxconn, and India's metals and mining conglomerate Vedanta have decided not to move forward with their joint venture to manufacture semiconductors in India's state of Gujarat. The two companies had signed a Memorandum of Understanding (MOU) in 2022, with Vedanta expected to hold the majority stake in the venture.
Foxconn said, "Foxconn is working to remove the Foxconn name from what now is a fully-owned entity of Vedanta."
However, both companies have reaffirmed their commitment to India's semiconductor mission and the Make in India program, according to statements from Minister for Electronics and Information Technology Ashwini Vaishnaw.
In a brief statement, Minister of State for Entrepreneurship, Skill Development, Electronics & Technology Rajeev Chandrasekhar said, “ Withdrawal of Foxconn from its JV with Vedanta changes nothing about India's semiconductor goals. It allows both companies to independently pursue their strategies for Indian semiconductors and electronics."
Vedanta has clarified that it remains dedicated to its semiconductor fab project and has lined up alternative partners to establish India's first foundry. The company claims to possess a license for production-grade technology for 40 nm from a prominent Integrated Device Manufacturer (IDM) and anticipates acquiring a license for production-grade 28 nm in the near future.
Vedanta Foxconn's semiconductor plans in India
The joint venture between Vedanta and Foxconn marked the largest investment by a corporate group in an Indian state. In September of the previous year, Vedanta had signed an in-principle agreement with the Gujarat government to establish a semiconductor and display manufacturing unit worth Rs 1.54 lakh crore in the coastal state. The project's ownership will be split, with Vedanta having a 60% equity stake and Foxconn having the other 40%. Foxconn was responsible for providing technical expertise, while Vedanta financed the project as part of its diversification into chip manufacturing.
India had received three applications for the establishment of semiconductor facilities under a $10 billion incentive program, projecting that its semiconductor industry will reach $63 billion by 2026. The applications were from the Vedanta-Foxconn joint venture, Singapore-based IGSS Ventures, and global consortium ISMC, which included Tower Semiconductor as a technology partner. However, the $3 billion ISMC project has also stalled due to Intel's acquisition of Tower Semiconductor, and the $3 billion plan by IGSS was halted for resubmission of the application. In response, India has reopened the call for applications from interested companies for the incentive programs.
— Harshita Kumar
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