Taiwan’s Foxconn opts out from the joint force from India’s conglomerate Vedanta with a 'mutual agreement'. However, Ashwini Vaishnav, India’s Union Minister has confirmed both firms are completely committed to India’s Make in India movement and its semiconductor mission.
Foxconn, the leading global electronics maker, and Vedanta, an Indian conglomerate jointly announced to manufacture semiconductors as a partnered venture on February 2022, in India. The partnership moved further in September when both firms signed a pact for setting up a plant with an investment of $19.5 billion in Gujarat’s Dholera. The contract had to be operational next year in 2024.
All of a sudden, on Monday, Foxconn made the announcement of pulling out of this joint venture.
The firm made it clear that it’s “working to remove the Foxconn name from what now is a fully-owned entity of Vedanta”.
Hon Hai Tech group said, “Foxconn has no connection to the entity and efforts to keep its original name will cause confusion for future stakeholders.”
So, what happened?
On Monday, Foxconn declared, “In order to explore more diverse development opportunities, according to a mutual agreement, Foxconn has determined it will not move forward on the joint venture with Vedanta.”
As per the statement, for more than a year, Vedanta and Foxconn have put in great effort to make the semiconductor scheme into reality. It claimed that the experience of working together was fruitful that both companies can strongly be going forward.
It said, “Foxconn is confident about the direction of India’s semiconductor development. We will continue to strongly support the government’s ‘Make In India’ ambitions and establish a diversity of local partnerships that meet the needs of stakeholders.”
The development comes right after a few months when Rajeev Chandrasekhar Deputy IT minister informed Reuters that JV was “struggling” in the tie-up with one of its technology partners, as reported by Firstpost. It also added that SEBI, in June, fined Vedanta for breaking the rules by publishing the PR and made it clear about its partnership with Foxconn for semiconductors business in India.
As per the report in media, Indian government raised questions on its application of an incentive scheme over chip production, which made Foxconn opt out from the joint venture alongside Vedanta, said the daily mail. New Delhi also asked various questions about cost estimates provided by them to avail incentives from the government, it added.
The deadlock talks of the involvement of European chipmaker STMicroelectronics as their tech partner was also there, previously reported by Reuters. Indian government wanted visible involvement as a tech partner, which STMicro was not keen on.
Ashwini Vaishnav, Union minister told News18 that “both the companies are fully committed to India’s semiconductor mission and make in India”.
While Rajeev Chandrasekhar took to Twitter to convey that “Foxconn to withdraw from its JV wth Vedanta has no impact on India's #Semiconductor Fab goals. None.”
“Both Foxconn n Vedanta have significant investments in India and are valued investors who are creating jobs n growth.” Also, “While their JV VFSL had originally submitted a proposal for 28nm fab, they could not source appropriate Tech partner for that proposal.”
“Its not for govt to get into why or how two private companies choose to partner or choose not to, but in simple terms it means both companies can & will now pursue their strategies in India independently, and wth appropriate technology partners in Semicon n Electronics.” he further added.
Vedanta has confirmed that it will stand on its move and is fully committed to its semiconductor project, and for that, it had “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 40nm [chips] from a prominent Integrated Device Manufacturer (IDM),” said the company.
“India remains pivotal in repositioning global semiconductor supply chains.”
Now, India has invited further applications from companies for their incentive scheme