NEW DELHI: In a temporary setback to India’s chip manufacturing plans, Foxconn on Monday decided to pull out of a
joint venture with Indian conglomerate Vedanta.
In a statement, Foxconn said it is “working to remove the Foxconn name from what now is a fully-owned entity of Vedanta”.
“Foxconn has no connection to the entity and efforts to keep its original name will cause confusion for future stakeholders,”
Hon Hai Technology group
Foxconn, the global contract electronics maker, and Vedanta had inked an agreement last year to build semiconductor and display production plants in Gujarat entailing an investment of about Rs 1.5 lakh crore.
“In order to explore more diverse development opportunities, according to mutual agreement, Foxconn has determined it will not move forward on the joint venture with Vedanta,” the company said.
The statement said that for over a yearm Hon Hai Technology Group (Foxconn) and Vedanta have worked hard to bring a great semiconductor idea to reality. It has been a fruitful experience that can position both companies strongly going forward.
“Foxconn is confident about the direction of India’s semiconductor development. We will continue to strongly support the government’s ‘Make In India’ ambitions and establish a diversity of local partnerships that meet the needs of stakeholders,” it said.
Post the announcement, Vedanta asserted that it is fully committed to its semiconductor project and has lined up other partners to set up India’s first foundry.
Vedanta in a statement said that it has redoubled efforts to fulfil PM Modi’s vision for semiconductors and affirmed that India remains pivotal in repositioning global semiconductor supply chains.
“Vedanta reiterates that it is fully committed to its semiconductor fab project and we have lined up other partners to set up India’s first foundry. We will continue to grow our Semiconductor team, and we have the license for production-grade technology for 40 nm from a prominent Integrated Device Manufacturer (IDM),” Vedanta said.
Meanwhile, Union minister of state for IT Rajeev Chandrasekhar said on Twitter that Foxconn’s decision to withdraw from its joint venture with Vedanta has no impact on India’s semiconductor fabrication goals.
He said that both the companies still have significant investments in India and are valued investors who are creating jobs as well as growth.
The minister that it’s not for the Centre to get into why or how two private companies choose to partner or choose not to partner.
“In simple terms, it means both companies can and will now pursue their strategies in India independently, and with appropriate technology partners in Semicon n Electronics,” he said.
Meanwhile, sources told Reuters that the Taiwan-based company pulled out of the joint venture after the government raised questions over its application for an incentive scheme for chip production.
Foxconn and Vedanta did not respond immediately to requests for comment.
(With agency inputs)