Foxconn exits US$20 billion Indian semiconductor joint venture, slowing country’s global chip hub march

Decision by electronic components giant a setback in New Delhi’s quest to become a global chip hub amid US-China tech war, analysts say

Vedanta Ltd’s lack of previous semiconductor technology experience cited as factor by Indian entrepreneurship minister

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Major Apple components suppliers like Foxconn have set their sights on India to carry out production. Photo: YouTube

Published: 5:00am, 11 Jul 2023Updated: 6:51pm, 11 Jul 2023

Electronics manufacturer Foxconn Technology Group, best known for assembling iPhones and other Apple products, on Monday announced it was withdrawing from a multibillion-dollar semiconductor joint venture with a Mumbai-based metals and mining conglomerate, dealing a blow to India’s chip-making ambitions.

The blockbuster US$20 billion partnership with Vedanta came together last year in a bid to manufacture semiconductors in Indian Prime Minister Narendra Modi’s home state of Gujarat. The proposed semiconductor fabrication plant sought initially to produce some 40,000 40-nanometre chips per month for smartphones, consumer electronics, automotives and networking equipment.

Taiwan-headquartered Foxconn, formally known as Hon Hai Precision Industry, on Monday said in a statement that it had “worked hard” with Vedanta for over a year “to bring a great semiconductor idea to reality”.

But now the world's largest electronics contract manufacturer had decided to explore “more diverse development opportunities”, the firm said, and had “determined not to move forward on the joint venture with Vedanta”, adding that the project was now a fully owned entity of the company.

Foxconn Technologies, headquartered in Taipei, is the world’s largest maker of electronic components. Photo Reuters

Though Foxconn did not disclose a reason for its exit, Rajeev Chandrasekahar, an Indian minister for entrepreneurship, skill development, electronics and technology, said via Twitter that as both companies lacked experience in semiconductor technology, it was expected they would source fab tech from a tech partner.

The Vedanta-Foxconn venture had originally submitted a proposal for a 28nm fab, Chandrasekahar tweeted, but the two could not source an appropriate tech partner.