Key Points
- Foxconn withdraws from a $19.4 billion deal with Vedanta to establish a semiconductor factory in India due to “challenging gaps” and external issues.
- Vedanta remains committed to the semiconductor fab project, actively seeking alternative partners, and acquiring licenses for advanced chip production.
On Tuesday, July 11, AFP reported that Taiwanese electronics company Foxconn had announced its withdrawal from a $19.4 billion deal with India’s Vedanta to manufacture semiconductors in India, citing “challenging gaps” as the reason. The agreement, signed in September, aimed to establish a chip factory in Gujarat state that would also produce display screens for phones and tablets. The objective was to enhance India’s self-sufficiency in the technology supply chain, recognizing the importance of semiconductors in various electronic devices. However, Foxconn stated that the project was not progressing at the desired pace, and they were unable to overcome the challenges and external issues unrelated to the project. Both companies had anticipated the facilities to be operational by 2024.
Foxconn clarified that the withdrawal would not result in a financial loss for them since they had not invested any capital or fixed assets in the joint venture. Although Vedanta did not confirm the withdrawal, the company reaffirmed its commitment to the semiconductor fab project, stating that it is actively seeking other partners to establish India’s first foundry. Vedanta’s spokesperson emphasized their dedication to fulfilling Prime Minister Narendra Modi’s vision for semiconductors, highlighting India’s significant role in repositioning global semiconductor supply chains. The spokesperson also revealed that Vedanta has obtained a license for production-grade technology to develop 40-nanometer chips and is in the process of acquiring a license for production-grade 28 nm chips.
Currently, the majority of the world’s leading chips are manufactured in Taiwan by Taiwan Semiconductor Manufacturing Company (TSMC) and in South Korea by Samsung. In late 2021, India approved a $10 billion incentive scheme to jumpstart its domestic semiconductor industry, pledging to cover up to 50% of project costs to compete in the semiconductor race.
About Foxconn
Established in 1974 in Taiwan, Hon Hai Technology Group (“Foxconn”) (TWSE:2317) is the world’s largest electronics manufacturer and leading technological solutions provider, ranking in the top 20 among the Fortune Global 500. In 2022, revenue totaled TWD6.62 trillion (approx. USD220 billion or EUR200 billion). The Group’s market share in electronics manufacturing services (EMS) exceeds 40% and covers four major product segments: smart consumer electronics; cloud and networking; computing; and components and others. The Group operates 173 campuses across 24 countries and is one of the world’s largest employers with over a million employees during peak manufacturing season. The Group has expanded its capabilities into the development of electric vehicles, digital health, and robotics, and three key technologies – new-generation communications technology, AI, and semiconductors – which are key to driving its long-term growth strategy. It is dedicated to championing environmental sustainability in the manufacturing process and serving as a best-practices model for global enterprises. To learn more, visit www.honhai.com
Credits: Photo by Laura Ockel on Unsplash
