Foxconn said on Monday it is pulling out of a joint venture with Vedanta Ltd, which was set up to make semiconductors from India.
"Foxconn 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.
Foxconn said it had worked with Vedanta for more than a year to bring "a great semiconductor idea to reality", but they had mutually decided to end the joint venture and it will remove its name from what now is a fully-owned Vedanta entity.
"Foxconn is working to remove the Foxconn name from what now is a fully-owned entity of Vedanta," said the Taiwanese electronics manufacturer.
Foxconn is best known for assembling iPhones and other Apple products, but in recent years it has been expanding into chips to diversify its business.
Vedanta said that "it is fully committed to its semiconductor fab project and we have lined up other partners to set up India’s first foundry".
"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). We will shortly acquire a license for production-grade 28 nm as well. Vedanta has redoubled its efforts to fulfill the Prime Minister's vision for semiconductors and India remains pivotal in repositioning global semiconductor supply chains," said Vedanta.
MoS IT Rajeev Chandrasekhar said on Monday that Foxconn's decision to withdraw from its JV wth Vedanta "has no impact on India's Semiconductor Fab goals. None".
Foxconn and Vedanta signed a pact last year to invest Rs 1.54 lakh crore to set up semiconductor and display production plants in Gujarat, seeking to tap into India's plans to become an electronics major.
They announced the plants at the Dholera Special Investment Region near Ahmedabad, Gujarat.
The semiconductor manufacturing facility was likely to get huge subsidies and incentives, like zero stamp duty on land purchase and subsidised water and electricity, under the ‘Gujarat Semiconductor Policy 2022-27.’
Vedanta-Foxconn had got STMicro on board for licensing technology, but Centre had made clear it wanted the European company to have more "skin in the game", such as a stake in the partnership. STMicro was not keen on that and the talks remained in limbo, Reuters reported previously.
Anil Agarwal-led Vedanta Group will acquire 100 per cent stake in semiconductor and display units from sister concern Twin Star Technologies, the conglomerate said on Friday.
Twin Star Technologies is a wholly-owned subsidiary of Volcan Investments Limited which is the ultimate holding company of Vedanta Limited.
The new structure will make Vedanta India's first company in Integrated Semiconductor and Display Fab Business. Vedanta said that semiconductor and display glass manufacturing represents a large growth opportunity for India.
It said that the semiconductor market stood at $24 billion in 2022 and is estimated to reach $80 billion by 2026.
The display panel market is estimated to be worth $7 billion and is expected to grow to $15 billion by 2025. Currently, India imports 100 per cent of these requirements, the statement said.