Foxconn Withdraws from $19.5 Billion Chip Venture, Hindering India's Semiconductor Plans
Taiwan's Foxconn terminates joint venture with Vedanta, dealing a blow to Prime Minister Narendra Modi's chipmaking ambitions for India.
Taiwan-based Foxconn, the world's largest contract electronics manufacturer, has announced its withdrawal from a $19.5 billion semiconductor joint venture with Indian conglomerate Vedanta. The partnership aimed to establish semiconductor and display production facilities in Gujarat, Modi's home state. Foxconn's statement did not elaborate on the reasons behind the decision, but the company emphasised its previous efforts to bring a semiconductor concept to fruition. Now, Foxconn will remove its name from the venture, which Vedanta fully owns.
Vedanta, on the other hand, remains committed to its semiconductor project and has secured alternative partners to establish India's first foundry. In its statement, Vedanta stated that it has redoubled its efforts to fulfil Modi's vision. However, a source familiar with the matter revealed that Foxconn's decision was partly influenced by concerns over delays in receiving government incentives. The Indian government had also raised questions regarding the cost estimates provided for incentive requests.
Prime Minister Modi has prioritised chipmaking as a key aspect of India's economic strategy, aiming to create a "new era" in electronics manufacturing. Foxconn's withdrawal deals a blow to his aspirations of attracting foreign investors for local chip production. Neil Shah, Vice President of research at Counterpoint, expressed that the collapsed deal is undoubtedly a setback for the "Make in India" initiative. He also noted that it raises doubts about Vedanta's credibility and may impact other companies' willingness to partner with them.
In response to the news, Deputy IT Minister Rajeev Chandrasekhar downplayed the significance, stating that Foxconn's decision would not affect India's plans. He highlighted that both companies were valued investors in the country and stated that it was not the government's role to interfere in private companies' partnership decisions.
Taiwan's Foxconn has withdrawn from its $19.5 billion semiconductor joint venture with Vedanta in India, impeding Prime Minister Narendra Modi's chipmaking plans.
The world's largest contract electronics manufacturer terminated the partnership without specifying the reasons. Vedanta remains committed to the semiconductor project and has found alternate partners.
Concerns over incentive approval delays and cost estimates contributed to Foxconn's decision.