Foxconn Pulls Out of $19.5B Chip JV With Vedanta

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Image Courtesy: Mac Rumors
  • Foxconn said that it would continue to support India’s domestic chip-making efforts.
  • Foxconn’s announcement comes a week after SEBI levied a fine of ₹30 lakh on Vedanta.

Taiwan-based Hon Hai Technology Group (Foxconn) pulled out of its $19.5 billion joint venture with the Vedanta Group on July 10, the firm announced in a statement. 

“To explore more diverse development opportunities, according to a mutual agreement, Foxconn has determined it will not move forward on the joint venture with Vedanta,” the company said in a statement.

Under the joint venture, the two firms, with no prior experience in chip manufacturing, were looking to collaborate with a third technology partner and invest jointly in a semiconductor fabrication plant in Gujarat, making 28-nanometre semiconductors. The companies had applied to the modified production-linked incentive (PLI) scheme, which would have covered 50% of the project’s cost.

Foxconn said that it was not breaking away from the Indian semiconductor space entirely and that it still supported the Indian government’s domestic chip-making efforts. The firm said it would “establish a diversity of local partnerships that meet the needs of stakeholders”.

Union information technology minister Ashwini Vaishnav said, “Both Foxconn and Vedanta are committed to prime minister Narendra Modi’s Make In India policy and India’s semiconductor programme. Foxconn withdrawing from the joint venture with Vedanta will not impact India’s semiconductor programme.”

He added, “It’s not for the government to get into why or how two private companies choose to partner or choose not to, but in simple terms, both companies can and will now pursue their strategies in India independently and with appropriate technology partners in semiconductors and electronics.” 

Foxconn’s announcement comes a week after the capital markets regulator Securities and Exchange Board of India (SEBI) levied a fine of ₹30 lakh on Vedanta for allegedly misleading market disclosures relating to the group’s proposed joint venture.

Following the company’s announcement, stock exchanges had sought clarification to which Vedanta replied that the proposed business of manufacturing semiconductors would not be under Vedanta Ltd but its holding company, Volcan Investments (VI).


 

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