NEW DELHI (AP) — Electronics giant Foxconn has pulled out of a $19.5 billion semiconductor joint venture with Indian mining conglomerate Vedanta Ltd. due to “external issues unrelated to the project”.
Hon Hai Technology, known internationally as Foxconn, and Vedanta Limited announced their joint venture to manufacture chips and display panels in India in February 2022. On Monday, Foxconn announced that it had mutually agreed to part ways with Vedanta Limited.
“This is not a negative point. Both parties recognized that the project was not moving fast enough, that there were difficult gaps that we could not overcome smoothly, as well as external problems without related to the project,” read a statement released on Tuesday. of the Taiwan-based company.
Vedanta said it has engaged other partners to set up India’s first semiconductor foundry to create the chips used in cellphones, refrigerators and cars.
Prime Minister Narendra Modi’s government has given chip manufacturing top priority under the country’s self-reliance policy by offering financial incentives of up to 50% of project costs under a plan $10 billion for semiconductor and display manufacturing projects as India battles to become a key player. in the global supply chain.
Indian government leaders say they are not too worried about the impact.
Electronics and Information Technology Minister Ashwini Vaishnaw said the two companies were engaged in India’s Semiconductor Mission, which is part of the country’s Make in India program to foster national development.
Rajeev Chandrasekhar, deputy minister of electronics and information technology, said on Tuesday that Foxconn’s decision will have no impact on India’s semiconductor manufacturing targets. “Both Foxconn and Vedanta have significant investments in India and are valued investors creating jobs and growth,” he said in a tweet.
Foxconn manufactures Apple iPhones in India and plans to expand production in the country, but it takes time to establish semiconductor operations, the company said.
“Foxconn first entered India in 2006 and we are still there. The group is eager to grow alongside India’s nascent semiconductor industry,” it said in a statement on Tuesday. The Taiwan-based company said it is working to apply for the amended government program for Semiconductors and Display Fab Ecosystem and is seeking other partners and stakeholders in India and overseas.
Several major investments by US-based companies in India were announced during Modi’s visit to Washington in June, which included a meeting with senior US and Indian leaders as the US seeks to foster cooperation with India on artificial intelligence, semiconductor production and space.
Micron Technology has agreed to build a $2.75 billion semiconductor assembly and test facility in India, with the US chip company spending about $800 million and India funding the rest. US-based Applied Materials will launch a new semiconductor commercialization and innovation center in India, and Lam Research, another semiconductor manufacturing equipment company, will launch a training program for 60,000 Indian engineers.