Gujarat govt in talks with Foxconn for chip plant after Vedanta JV falls apart

Gujarat government is engaging in discussions with Foxconn regarding the establishment of a semiconductor plant, according to a senior government official.

This development comes shortly after the Taiwanese semiconductor giant terminated its $19.5 billion joint-venture plan with Vedanta.

"We are in touch with multiple prospective investors, including Foxconn... Gujarat is uniquely positioned to attract top chipmakers,” said Vijay Nehra, the secretary of the science and technology department in Gujarat.

Foxconn recently withdrew from its project with Vedanta, which was also intended for Prime Minister Narendra Modi's home state of Gujarat, citing slow progress as one of the reasons for the breakup.

The dissolution of the joint venture dealt a blow to Modi's vision of establishing India as a hub for semiconductor manufacturing. However, Foxconn later expressed its intention to apply for chip incentives in India independently and explore new partnerships.

PM Modi has placed great emphasis on chipmaking as a top priority in his pursuit of a "new era" in electronics manufacturing. However, his plan has faced challenges thus far.

Last year, three companies, including the Vedanta-Foxconn joint venture, Singapore-based IGSS Ventures, and the global consortium ISMC, which includes Tower Semiconductor as a tech partner, applied for incentives. However, no deals have been finalised to date.

Explaining the decision to end the Vedanta partnership, Foxconn stated that "there was recognition from both sides that the project was not moving fast enough" and that they encountered "challenging gaps" that could not be easily overcome, without providing further details.

The discussions between Foxconn and Gujarat come close on the heels of Micron Technology's announcement a few weeks ago that it will invest up to $825 million in a semiconductor testing and packaging facility in the state.