Foxconn withdraws from its JV with Vedanta; Centre says no impact on India's semiconductor goals

Rajeev Chandrasekhar, Union Minister of State for Electronics and Technology, asserted that Foxconn’s decision to end its semiconductor joint venture (JV) with Indian mining giant Vedanta had no bearing on India’s semiconductor manufacturing objectives.

In September 2022, the Gujarat government signed Memorandums of Understanding with the Anil Agarwal-led Vedanta Limited and Taiwan’s Foxconn for the establishment of a semiconductor and display manufacturing unit in the state with an investment of over Rs 1.54 lakh crore. Additionally, a joint venture was signed.

“This decision of Foxconn to withdraw from its JV with Vedanta has no impact on India’s Semiconductor Fab goals. None,” Chandrasekhar said in a tweet on Monday.

According to the minister, Vedanta and Foxconn are respected investors who are generating growth and jobs in India through their large investments.

“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,” he said.

According to him, Vedanta through VFSL recently filed a 40nm fab proposal that is currently being assessed by a Tech Advisory Group and is supported by a tech licencing agreement from a global semiconductor major.

“It is not for government 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 and will now pursue their strategies in India independently, and with appropriate technology partners in Semicon and Electronics,” the minister said.

In the 18 months since Prime Minister Narendra Modi approved India’s semiconductor strategy and policy, he claimed, the country’s plan to catalyse the semiconductor ecosystem has advanced quickly.

“To those editorializing about this decision of Foxconn/Vedanta being a ‘blow’ to India’s Semicon ambition , I can only say it’s a bad idea to bet against India under PM Modi. India is just getting started,” he said.

India wants to dominate the semiconductor supply chain and develop into a major global manufacturing base. The central government has made a number of significant actions to lessen the reliance on electronic goods imports by encouraging domestic production of electronic, semiconductor, and component items.

(with agency inputs)