Foxconn Withdraws from $19.5 Billion Partnership with Vedanta

By IndraStra Global News Team

Foxconn Withdraws from $19.5 Billion Partnership with Vedanta

The Vedanta-Foxconn semiconductor manufacturing plant in Gujarat, which the Indian government celebrated in September 2022, has experienced a sudden end. Both Gujarat's Chief Minister Bhupendra Patel and Union IT Minister Ashwini Vaishnaw were present while signing a Memorandum of Understanding (MoU) with the state government in Gandhinagar. However, less than a year later, Foxconn withdrew from the joint venture with Vedanta, which aimed to establish a $19.5 billion plant. 

Foxconn clarified in a statement that it is working to have Vedanta fully own the entity and remove its name from it. Foxconn expressed concern that retaining its original name would confuse future stakeholders. Furthermore, it also reaffirmed its commitment to invest in Indian chipmaking, saying it will apply for a government program that subsidizes the cost of setting up semiconductor or electronic display production facilities in the country.

On the other hand, Vedanta has clarified its commitment to the semiconductor fabrication project and has secured other partners to establish India's first foundry. The company also asserts that it possesses a license for production-grade technology for 40 nm from a prominent Integrated Device Manufacturer (IDM). However, in a previous interview with Business Today, David Reed, CEO of Vedanta Semiconductors, stated that the responsibility for onboarding a technology partner rested with Foxconn, not Vedanta. With Foxconn withdrawing from the joint venture, there are uncertainties regarding Vedanta's access to production-grade technology and intellectual property (IP) for semiconductor fabrication.

Vedanta also states that it intends to obtain a license for production-grade 28 nm technology in the near future. However, neither Vedanta nor Foxconn has provided any reasons for terminating the joint venture.

Since the initial plans of Anil Agarwal-led Vedanta to enter the semiconductor fabrication industry, the company has faced numerous challenges and setbacks, primarily negative experiences. The entire company has been entangled in controversies and faced rejections. These difficulties mainly arose because Vedanta and Foxconn lacked prior experience in establishing a silicon fabrication facility, and the joint venture struggled to secure a technology partner. The Ministry of Electronics and IT had hoped for Foxconn to take the lead in the joint venture, and there were rumors that they urged STMicroelectronics to increase their involvement. If the joint venture had successfully onboarded a reputable technology provider for semiconductor fabrication, the plans would have transitioned from mere concepts to actual realization.

NOTE: Foxconn acquired 300 acres of land in March near Bengaluru airport in Devanahalli. They are expected to invest approximately $1 billion in this location to manufacture iPhones for Apple. Meanwhile, there have been discussions about the implications for Karnataka following the Taiwanese firm's decision to step back from the semiconductor and display production plant in Gujarat.

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IndraStra Global: Foxconn Withdraws from $19.5 Billion Partnership with Vedanta
Foxconn Withdraws from $19.5 Billion Partnership with Vedanta
By IndraStra Global News Team
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