Delays in approvals for incentives by the Indian government had reportedly driven Foxconn’s decision to pull out of the JV, which planned to build a semiconductor fab unit, a display fab unit, and a semiconductor assembling and testing unit
Foxconn withdraws from $18.7bn semiconductor project in India with Vedanta. (Credit: brookhaven from Pixabay)
Hon Hai Technology Group (Foxconn) has withdrawn from the chip manufacturing project it planned to establish alongside Indian conglomerate Vedanta in Gujarat, India with an investment of INR1,540bn ($18.7bn).
The Taiwan-based electronics contract manufacturer said that it worked with Vedanta for over a year to turn a major semiconductor idea into reality, reported Reuters.
However, both companies have mutually decided to scrap the joint venture (JV). Foxconn will remove its name from an entity that is now 100% owned by Vedanta
Foxconn has been quoted by the publication, as stating: “Foxconn has determined it will not move forward on the joint venture with Vedanta.”
The companies have not provided the reasons for the mutual termination.
According to various reports across the media, Vedanta stated: “Vedanta reiterates that it is fully committed to its semiconductor fab project and we have lined up other partners to set up India’s first foundry.
“We will continue to grow our Semiconductor team, and we have the license for production-grade technology for 40 nm from a prominent Integrated Device Manufacturer (IDM).”
Besides, the company said that it will also soon acquire a license for production-grade 28nm. Vedanta claimed that it has redoubled its efforts to fulfill Indian Prime Minister Narendra Modi’s vision for semiconductors and that India remains central in shifting global semiconductor supply chains.
Delays in approvals for incentives by the Indian government had driven Foxconn’s decision to pull out of the semiconductor JV, reported Reuters, citing a source with knowledge of the matter.
Both companies announced their chip manufacturing project in September 2022.
Foxconn was expected to have a 40% stake in the JV to be created for the project, while Vedanta was to own the remaining 60%.
The Indian company also signed two memorandums of understanding (MoU) with the Gujarat government for the project.
The MoUs were for constructing a semiconductor fab unit, a display fab unit, as well as a semiconductor assembling and testing unit in the Ahmedabad district of the western Indian state.