Foxconn to apply for India chipmaking incentives separately after pulling out of $19.5-bn JV with Vedanta

Taiwan's Foxconn (Hon Hai Technology Group) on Tuesday said it plans to apply for incentives that the Indian government is offering under its semiconductor manufacturing policy, Reuters reported.  

The Taiwanese firm has now said that it is reviewing the landscape for optimal partners for the project in India.

By applying for a separate chip manufacturing unit in India, Foxconn is planning to seek the benefit of incentives that India is offering under its semiconductor manufacturing policy.

 “Foxconn is working toward submitting an application related to Modified Programme for Semiconductors and Display Fab Ecosystem. We have been actively reviewing the landscape for optimal partners," Foxconn said in a statement.

The company said it is aggressively planning to enter India's semiconductor market by collaborating with international partners. The company is in active talks with local and international partners for establishing semiconductor production in India with the help of mature chip manufacturing technology for products including electric vehicles (EVs).

It added: "Foxconn is committed to India and sees the country successfully establishing a robust semiconductor manufacturing ecosystem… Foxconn is working toward submitting an application."

On Monday, Foxconn pulled out of its joint venture with the Vedanta Group, which was worth $19.5 billion. In 2022, the two companies formed a joint venture, where Vedanta had a 67 per cent stake, to set up a semiconductor fab unit at Dholera in Gujarat.

In a statement, the company said: “In order 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.”  

On Tuesday, Foxconn said: “There was recognition from both sides that the project was not moving fast enough and there were other challenging gaps we were not able to smoothly overcome, without sharing details.”

Also read: Vedanta’s technology partnership in question as Foxconn exits semiconductor JV

After Foxconn's withdrawal, Minister of State for Electronics and Information Technology Rajeev Chandrasekhar said on Twitter that Foxconn exiting the venture would not impact India’s semiconductor ambitions. “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,” Chandrasekhar said on Tuesday.

In a statement, Vedanta said that it would forge ahead with other partners. “We will continue to grow our Semiconductor team, and we have the license for production-grade technology for 40nm [chips] from a prominent Integrated Device Manufacturer (IDM),” the company said. “India remains pivotal in repositioning global semiconductor supply chains.”

The Narendra Modi-led government has reworked the $10 billion plan offering financial incentives of up to 50 per cent of capital costs for semiconductor and display manufacturing projects.

On June 1, India reopened the applications for the semiconductor fabrication plants and started accepting and evaluating new applications. The government also asked the existing applicants to apply afresh, including Vedanta, and pursue mature nodes as well.

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