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

The industry was abuzz with rumours of Foxconn (Hon Hai Technology Group) killing its joint venture with Vedanta to set up a semiconductor fabrication unit in India. Business Today had reached out to both parties. While Foxconn remained silent, Vedanta denied the development. However, Foxconn has acknowledged that it is not moving forward on the joint venture with Vedanta, according to a report.

Last year, the two companies formed a JV, where Vedanta had a 67 per cent stake, to set up a semiconductor fab unit at Dholera in Gujarat. Just last month, 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. Business Today had reported that the JV had resubmitted an application for a silicon fabrication plant.

Although they have not commented on the JV, Vedanta clarified to Business Today that it is committed to its semiconductor fab project and has lined up other partners to set up India’s first foundry. Vedanta also claims that it has a licence for production-grade technology for 40 nm from a prominent Integrated Device Manufacturer (IDM). However, David Reed, CEO of Vedanta Semiconductors, had earlier told Business Today that the onus for onboarding a technology partner rested with Foxconn and not Vedanta. But now with Foxconn pulling out of the JV, Vedanta’s access to a production-grade technology and IP for semiconductor fabs remain a big question. Vedanta is also claiming that it will shortly acquire a licence for production-grade 28 nm as well. 

Neither Vedanta nor Foxconn has cited reasons for ending the joint venture.

Right from Anil Agarwal-led Vedanta planning to enter this space, the company had its share of ups and downs but mostly downs. The entire company had been embroiled in controversies and rejections. Mostly because both Vedanta and Foxconn had no prior experience in setting up a silicon fab, and the joint venture even struggled to onboard a tech partner. The Ministry of Electronics and IT had wanted Foxconn to take the lead in the JV and was rumoured to ask STMicroelectronics to put more skin into the game. If the joint venture would have onboarded a credible IP technology for fabs, the plans would have jumped from paper to reality.

But given the turbulence the joint venture had been under, it will be worrisome for the players like Tata that might have the potential to enter this space (with the right partners, of course) as all the new applications will be under scrutiny for the technology grade production.