Taiwan's Foxconn said on July 10 that it is pulling out of a joint venture with billionaire Anil Agarwal-led Vedanta Ltd that was set up to produce semiconductors from India.
Foxconn and Vedanta signed a pact last year to invest $19.5 billion to set up semiconductor and display production plants in the western state of Gujarat, seeking to tap into the country's plans to become an electronics major.
In a statement, the electronic major said, "Foxconn 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."
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 added.
Meanwhile, Vedanta stated that it is "fully committed to its semiconductor fab project," after Foxconn's exit announcement.
"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," said a spokesperson from Vedanta, adding, "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). We will shortly acquire a license for production-grade 28 nm as well."
Last week, Vedanta Group had taken full ownership of the joint venture with Foxconn set up last year to manufacture semiconductors in India.
The JV, Vedanta Foxconn Semiconductors Private Limited, was a wholly owned subsidiary of Vedanta group entity Twin Star Technologies Limited.
The new structure will make Vedanta India's first company in Integrated Semiconductor and Display Fab Business. With this restructuring, Vedanta Limited announced the addition of semiconductors and display glass manufacturing ventures to its diversified portfolio. With this restructuring, Vedanta Limited announced the addition of semiconductors and display glass manufacturing ventures to its diversified portfolio.
In the largest investment by a corporate group in an Indian state, Vedanta had signed an in-principle agreement with the Gujarat government to set up a Rs 1.54 lakh crore semiconductor and display manufacturing unit in the coastal state in September last year.
Vedanta had announced that it was tying up with Foxconn of Taiwan to set up the unit. The companies were earlier reported to have zeroed in on Maharashtra for the strategic investment.
As per the deal, Vedanta would have held 60 percent of the equity in the venture, with Foxconn owning the remaining 40 percent. Foxconn was the technical partner in the venture and the oil-to-metals conglomerate Vedanta is financing the project as it looks to diversify into chip manufacturing.
India, which expects its semiconductor market to be worth $63 billion by 2026, last year received three applications to set up plants under a $10 billion incentive scheme.
These were from the Vedanta-Foxconn joint venture, a global consortium ISMC which counts Tower Semiconductor as a tech partner and from Singapore-based IGSS Ventures.
The $3 billion ISMC project has stalled too due to Tower being acquired by Intel, while another $3 billion plan by IGSS was also halted as the firm wanted to re-submit its application
(With inputs from agencies)