Taiwan’s Foxconn said on Monday it has withdrawn from a $19.5 billion semiconductor joint venture with Indian metals-to-oil conglomerate Vedanta, in a setback to Prime Minister Narendra Modi’s chipmaking plans for India. Foxconn, the world’s largest contract electronics maker, and Vedanta signed a pact last year to set up semiconductor and display production plants in Modi’s home state of Gujarat. “Foxconn (2354.TW) has determined it will not move forward on the joint venture with Vedanta,” the electronics maker said in a statement, without elaborating on the reasons.
The Foxconn-Vedanta joint venture, announced with much fanfare, aimed to leverage their respective expertise in technology manufacturing and natural resource extraction. The collaboration sought to establish a state-of-the-art chipmaking facility, addressing the growing demand for semiconductors worldwide. The ambitious project, backed by a substantial investment of $19.5 billion, held promising prospects for both companies.
Speculations suggest that disagreements over strategic direction, financial concerns, or regulatory hurdles could have influenced Foxconn’s retreat. It is crucial to analyze the precise reasons to gain a comprehensive understanding of the situation.
After collaborating with Vedanta for over a year to transform a promising semiconductor concept into reality, Foxconn announced their mutual decision to terminate the joint venture. Consequently, Foxconn will disassociate itself from the entity, which now solely belongs to Vedanta.
The significance of chipmaking in India’s economic strategy, as emphasized by Prime Minister Modi, has suffered a setback with Foxconn’s withdrawal. The Indian government’s ambition of attracting foreign investors to establish local chip manufacturing capabilities for the first time is dealt a blow by this development.
However in May, Foxconn decided to invest 500 million in Telangana to produce their Apple smartphones there. Foxconn the partner company of Apple , has decided to invest $500 million to set up manufacturing plants in the state of Telangana, which is a part of their plan of expansion its base in South Asian market. Foxconn in late March received approval from the Karnataka government for a $968 million investment in the southern state.
