Taiwan’s Foxconn has decided to withdraw from a joint venture with mining magnate Anil Agarwal’s Vedanta due to difficulties in finding a technology partner for chip production. Foxconn, the largest contract electronics manufacturer in the world, released a statement stating their decision not to proceed with the joint venture. Vedanta, a conglomerate engaged in metal and oil businesses, responded by expressing their commitment to the semiconductor fab project and mentioned that they have identified alternative partners for establishing India’s first foundry. Unfortunately, they did not disclose the identity of these partners.
Last year, Foxconn and Vedanta signed an agreement to establish semiconductor and display production plants in Gujarat. However, talks with European chipmaker STMicroelectronics, which was intended to serve as a technology partner for the joint venture, reached a deadlock.
India is a late entrant in the global semiconductor market, which is dominated by a few countries. Nonetheless, India expects its semiconductor market to reach a value of $63 billion by 2026. In response to the government’s incentive scheme for local semiconductor manufacturing, three applications were submitted. These include one from the Vedanta-Foxconn joint venture, another from a global consortium of ISMC, and one from Singapore-based IGSS Ventures. Unfortunately, progress has been limited for all three applications.
Recently, Vedanta announced its acquisition of the semiconductor and display glass units from Twin Star Technologies, a group company. Twin Star’s subsidiaries, Vedanta Foxconn Semiconductors and Vedanta Displays, will be fully acquired by Vedanta. Subsequently, Foxconn expressed their intention to have their name removed from the fully-owned entity of Vedanta, stating that retaining the original name would cause confusion among future stakeholders.
Foxconn acknowledged the productive collaboration with Vedanta over the past year, expressing confidence in the direction of India’s semiconductor development. They emphasized their continued support for the government’s “Make In India” initiative and their commitment to establishing diverse local partnerships to meet stakeholders’ needs.
Despite Foxconn’s withdrawal, Vedanta remains dedicated to its semiconductor project. They have identified alternative partners for setting up India’s first foundry, reaffirming their commitment to Prime Minister Narendra Modi’s vision for semiconductors. Vedanta also holds a license for production-grade technology for 40 nm from a prominent Integrated Device Manufacturer (IDM), with plans to acquire a license for production-grade 28 nm. They emphasized India’s importance in repositioning the global semiconductor supply chains.
Vedanta had initially planned to invest approximately ₹1.5 lakh crore in setting up the chip plant in Gujarat.
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