Foxconn dumps $19.5 billion Vedanta chip plan in blow to India. Foxconn withdraws from India’s semiconductor JV with Vedanta.
JV, Vedanta & Foxconn
Foxconn’s withdrawal from semicon JV with Vedanta has no impact on India’s goals: Rajeev Chandrasekhar
Foxconn pulls out of joint venture, Vedanta to take over semiconductor JV from holding company.
Both Foxconn & Vedanta are fully committed to India’s Semiconductor Mission & Make in India, says Ashwini Vaishnaw
Vedanta & Foxconn
Union Minister of State for Entrepreneurship has released a statement after the news of Foxconn and Vedanta collab going sour began doing rounds.
This decision of 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.
It was well known that both companies had no prior semicon experience or Technology and were expected to source Fab tech from a Tech partner.
While their JV VFSL had originally submitted a proposal for 28nm fab, they could not source appropriate Tech partner for that proposal.
Vedanta thru VFSL has recently submitted a 40nm fab proposal backed by Tech licensing agreement from a Global Semicon major – which is currently being evaluated by Semicon India Tech Advisory group.
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
India’s strategy of catalyzing Semiconductor Ecosystem has seen rapid progress in the 18 months since PM
Narendra Modi ji approved Indias Semicon strategy n policy.
To those editorializing abt this decision of Foxconn/Vedanta being a “blow” to Indias Semicon ambition , I can only say its a bad idea to bet against India under PM Modi.
Taiwan’s Foxconn Withdraws from $19.5 Billion Semiconductor Joint Venture with Vedanta: Impact on India’s Chipmaking Plans.
In a major setback to Prime Minister Narendra Modi’s chipmaking plans for India, Taiwan’s Foxconn announced on Monday that it has withdrawn from a $19.5 billion semiconductor joint venture with Indian metals-to-oil conglomerate Vedanta.
The joint venture aimed to establish semiconductor and display production plants in Gujarat. The decision by Foxconn, the world’s largest contract electronics manufacturer, to pull out of the partnership raises concerns about India’s ambition to attract foreign investors to manufacture chips domestically.
This article examines the reasons behind Foxconn’s withdrawal and the implications for India’s chipmaking industry.
Table of Contents
Introduction
The collaboration between Foxconn and Vedanta was initially seen as a significant step towards realizing India’s goal of becoming a major player in chip manufacturing.
However, the recent withdrawal of Foxconn from the joint venture raises questions about the future of India’s chipmaking plans and the challenges faced by the country in attracting foreign investments in this sector.
Foxconn’s withdrawal from the joint venture
Foxconn’s decision to terminate the joint venture with Vedanta comes as a surprise. The company stated that it had been working with Vedanta for over a year to transform a semiconductor idea into reality.
However, they mutually agreed to dissolve the partnership without providing specific reasons for their decision. As a result, the joint venture will now become a fully-owned Vedanta entity, excluding Foxconn’s involvement.
Implications for PM Modi’s chipmaking plans
Prime Minister Narendra Modi has prioritized the development of the chipmaking industry as part of India’s economic strategy.
The withdrawal of Foxconn from the joint venture represents a setback to Modi’s ambitions of attracting foreign investors to establish chip manufacturing facilities in India.
It highlights the challenges associated with creating a favorable environment for semiconductor companies and underscores the need for a more comprehensive strategy to realize India’s chipmaking goals.
Foxconn’s expanding focus on chips
While Foxconn is renowned for assembling iPhones and other Apple products, the company has been diversifying its business in recent years by venturing into the chip manufacturing sector.
The decision to withdraw from the Vedanta joint venture might be a strategic move by Foxconn to focus on its own chipmaking initiatives rather than collaborating with other companies.
This shift in focus could have implications for India’s chipmaking aspirations, as it reduces the involvement of a major global player.
Challenges faced by the Vedanta-Foxconn project
The Vedanta-Foxconn joint venture faced various challenges that hindered its progress. One of the key obstacles was the negotiation with European chipmaker STMicroelectronics to become a partner in the project.
These discussions reached an impasse as the Indian government expressed a desire for STMicroelectronics to have a more substantial stake in the partnership.
However, the European company was hesitant to commit to such an arrangement. These obstacles contributed to delays in the project and eventually led to its dissolution.
The status of India’s semiconductor market
India has high hopes for its semiconductor market, projecting it to be worth $63 billion by 2026. To stimulate investment in this sector, the Indian government launched a $10 billion incentive scheme, which attracted applications from several companies, including the Vedanta-Foxconn joint venture.
However, the project’s withdrawal, combined with the stalling of other major chipmaking initiatives, has raised concerns about the realization of India’s semiconductor ambitions.
The acquisition of Tower Semiconductor by Intel also impacted the progress of a $3 billion project, while a $3 billion plan by IGSS Ventures was halted due to the firm’s desire to revise its application.
Conclusion
Foxconn’s withdrawal from the $19.5 billion semiconductor joint venture with Vedanta deals a blow to Prime Minister Narendra Modi’s chipmaking plans for India.
The decision highlights the challenges associated with attracting foreign investments in the chip manufacturing sector and underscores the need for a more comprehensive strategy to realize India’s semiconductor ambitions.
As the Indian government aims to position the country as a global player in chip production, it must address the hurdles faced by potential investors and foster an environment conducive to the growth of the semiconductor industry.
FAQs
1. Will Foxconn’s withdrawal significantly impact India’s chipmaking plans?
Foxconn’s withdrawal represents a setback to India’s chipmaking plans but does not necessarily mean the end of the country’s aspirations in this sector. It emphasizes the need for the Indian government to address the challenges faced by potential investors and develop a more comprehensive strategy to attract foreign investments.
2. What are the challenges hindering the growth of India’s chipmaking industry?
India faces challenges such as negotiating partnerships with global semiconductor companies, establishing a favorable investment environment, and addressing regulatory and infrastructure concerns. Overcoming these obstacles requires concerted efforts from the government and industry stakeholders.
3. Is India’s semiconductor market still expected to grow despite the setback?
Despite the challenges and setbacks, India’s semiconductor market is projected to grow to $63 billion by 2026. The market potential remains significant, and the government’s commitment to developing the industry suggests that efforts will continue to attract investments and foster growth.
4. How can India attract foreign investors to its chipmaking sector?
To attract foreign investors, India must create a favorable investment climate by addressing infrastructure challenges, simplifying regulatory processes, and offering attractive incentives. Additionally, collaboration with global chipmakers and establishing robust research and development capabilities will enhance India’s appeal as a chip manufacturing destination.
5. What role does the government play in India’s chipmaking plans?
The government plays a crucial role in facilitating the growth of India’s chipmaking industry. It must create an enabling environment by implementing supportive policies, offering incentives, and actively engaging with industry stakeholders to attract foreign investments and foster domestic capabilities.