Foxconn pulls out of chip JV with Vedanta

New Delhi, July 10

Taiwan’s Foxconn on Monday withdrew from the semiconductor joint venture with billionaire Anil Agarwal-led Vedanta in a divorce that was in the works after the government turned down its request for subsidy and also asked it to get a technology partner and a manufacturing-grade technology licence to make 28 nanometre chips.

“Foxconn has no connection with the entity and efforts to keep its original name will cause confusion for future stakeholders,” said the company, also known as Hon Hai Technology Group.

Just before the Gujarat Assembly elections last year, Foxconn, a Taiwan-based contract electronics maker, and Vedanta had signed a pact to jointly build semiconductors and display production plants in Gujarat at an investment of about Rs 1.5 lakh crore. Initial plans were to set up the plant in Maharashtra where Talegaon was zeroed in for the manufacturing site. Reacting to the development, Minister of State for Electronics and Technology Rajeev Chandrashekhar said it won’t impact Indian semiconductor goals. In a series of tweets, he said it was well known that both companies had no prior semicon experience or technology, and were expected to source fab tech from a tech partner.

“While their JV VFSL had originally submitted a proposal for 28 nm fab, they could not source an appropriate tech partner for that proposal. Through VFSL, Vedanta has recently submitted a 40 nm fab proposal backed by tech licensing agreement from a global semicon major, which is currently being evaluated by the Semiconductor India Tech Advisory Group,” the minister tweeted after Foxconn said it was “working to remove the Foxconn name from what now is a fully-owned entity of Vedanta”.

“In order to explore more diverse development opportunities, according to mutual agreement, Foxconn has determined it will not move forward on the joint venture with Vedanta,” a company statement read.

It said for over a year, Hon Hai Technology Group (Foxconn) and Vedanta worked hard to bring the semiconductor idea to reality. “We will continue to strongly support the ‘Make in India’ ambitions,” it said.

The pullout comes at a time when a US-based chip maker has announced plans to set up a chip assembly unit in India.

Other partners lined up: Vedanta

Vedanta said it was committed to its semiconductor fab project and had lined up other partners to set up India’s first foundry. “We will continue to grow our semiconductor team,” it said.