Foxconn dumps $19.5 bln Vedanta chip plan in blow to India

In a blow to Indian Prime Minister Narendra Modi’s plans to produce chips in India, Foxconn of Taiwan has pulled out of a $19.5 billion semiconductor joint venture with Vedanta of India. In order to establish semiconductor and display panel manufacturing facilities in Gujarat, Vedanta and Foxconn, the largest contract electronics manufacturer in the world, reached an agreement last year. 

The former said on Monday that it would not be pushing forward with the joint venture arrangement without providing any other details. Even though Foxconn has been collaborating with Vedanta for over a year to build display panels and effective semiconductors to India, it was one of the first few companies to join the government’s crucially important India Semiconductor Mission. As a result of their recent mutual decision to discontinue the joint venture, Foxxconn will have its name removed from the newly fully-owned Vedanta organization.

Ashwini Yadav, the Union Minister for Electronics and IT, claims that both businesses are dedicated to advancing the domestic semiconductor market and the “Make in India” movement. The semiconductor mission is unaffected by this change. 

Additionally, Rajiv Chandrasekhar, Minister of State for Electronics and IT, stated that both businesses were required to find a fab tech from a tech partner because they lacked any prior semiconductor manufacturing experience. In spite of the fact that their joint venture had initially proposed a 28 nm (Nanometer) fab, they were unable to find a suitable tech partner. 

Vedanta has since re-submitted a proposal for a 40 nm fab that is being assessed by the government’s technology advisory council. This plan is supported by a joint venture that has a tech license deal with a major semiconductor manufacturer. 

Additionally, the government is in discussions with Synopsis, a US company that might make an investment in India.  Synopsys is a manufacturer of precise tools used in semiconductor chip production and fabrication. All of these concepts will include incentives that fit under the semiconductor objective.    

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