Foxconn may partner with TSMC and TMH to set up semiconductor units in India: Report

After calling off its JV with Vedanta Group, Foxconn is reportedly discussing partnership deals with Taiwan Semiconductor Manufacturing Co (TSMC) and Japan’s TMH Group for technology for setting up semiconductor fabrication units in India. Foxconn, which manufactures iPhones for Apple, and TSMC are both based in Taiwan.  

It’s likely to soon finalise the details of the partnership to manufacture both advanced and legacy node chips, The Economic Times reported on Friday. 

Taiwan Semiconductor Manufacturing Co is one of the largest chip foundries in the world, while TMH offers semiconductor-related solutions and operation and maintenance of manufacturing equipment. 

TSMC, which produces more than 50 per cent of the chips manufactured worldwide, reported a 33.5 per cent increase in revenue to $75.88 billion in 2022 from the previous year. The company also shipped 15.3 million 12-inch equivalent wafers last year, compared with 14.2 million in 2021, according to the report. Its chips are used by almost all top semiconductor companies, like AMD, Apple, ARM, Broadcom, Marvell, MediaTek, and Nvidia. 

Earlier this week, Foxconn called off the chipmaking joint venture with Anil Agarwal-controlled Vedanta and said it intends to apply for incentives under the government’s semiconductor production plan separately. 

The Vedanta-Foxconn consortium was one of the five applicants seeking government incentives under a $10-billion package announced in December 2021 to promote domestic semiconductor manufacturing.

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The Centre is offering a 50 per cent subsidy on capital expenditure to companies that set up chip manufacturing units in the country. 

Besides, in order to attract such projects under the India Semiconductor Mission (ISM), states were prepared to provide further subsidies of 15-25 per cent. That means as much as 75 per cent of the total project cost potentially being covered. 

It was reported earlier that Foxconn had been in advanced talks with European company STMicro and GlobalFoundries of the US for a technology partnership for the JV with Vedanta. 

The Central government had told Vedanta-Foxconn that they need a technology partner as they lacked semiconductor manufacturing knowhow. Following which, Foxconn was discussing the deal with STMicro and GlobalFoundries. The report said that Foxconn might rope in STMicro or GlobalFoundries for its Indian plans.  

On Wednesday, Foxconn said it remains committed to building India’s semiconductor ecosystem and will begin afresh with new partners. 

In a statement, Foxconn said it has initiated talks with both Indian as well as global companies for a potential partnership and will resubmit its application to the government under the Modified Programme for Semiconductors and Display Fab Ecosystem policy. 

“It is challenging to build fabs from scratch in a new geography, but Foxconn is committed to invest in India. We are working on such challenges since the 1980s. 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." 

Foxconn has mobile phone assembly units in South India producing millions of iPhones and Xiaomi smartphones. 

It also manufactures other electronic products including EVs. 

“Foxconn first entered India in 2006. The group looks to grow with India’s nascent semiconductor industry. Foxconn has channels of communications with government stakeholders and we are clear about continued commitment to India," the company added. 

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