Foxconn, the global contract electronics manufacturer, has decided to withdraw from its semiconductor joint venture with Indian conglomerate Vedanta, delivering a temporary setback to India's chip manufacturing plans. The decision was announced on Monday, July 10, with Foxconn stating its intention to remove its name from the fully-owned entity of Vedanta.
In a statement, Foxconn clarified that it has no connection to the entity and expressed concern that efforts to retain its original name would cause confusion for future stakeholders. The agreement between Foxconn and Vedanta, signed last year, aimed to establish semiconductor and display production plants in Gujarat, involving an investment of approximately Rs 1.5 lakh crore.
However, Foxconn has now decided not to proceed with the joint venture, citing the need to explore more diverse development opportunities. The company emphasised its confidence in the direction of India's semiconductor development and pledged continued support for the government's "Make In India" ambitions.
In response to Foxconn's decision, Vedanta affirmed its full commitment to its semiconductor project and announced that it has lined up other partners to establish India's first foundry. The company reiterated its dedication to fulfilling Prime Minister Narendra Modi's vision for semiconductors and emphasised India's pivotal role in repositioning global semiconductor supply chains.
Union Minister of State for IT Rajeev Chandrasekhar reassured that Foxconn's withdrawal would not impact India's semiconductor fabrication goals, highlighting the significant investments and job creation by both companies in the country. He emphasised that the partnership or non-partnership decisions of private companies are not within the purview of the government.
Union Minister of Electronics and IT Ashwini Vaishnaw echoed Chandrasekhar's sentiment, emphasising the commitment of both companies to India's semiconductor mission and the country's Make-in-India program.
According to sources cited by Reuters, Foxconn's decision to withdraw from the joint venture was influenced by the Indian government's raising of questions regarding the company's application for an incentive scheme related to chip production.