Foxconn pledges to find new partner for India chip plan after quitting US$19 billion deal with Vedanta
- ‘Building fabs from scratch in a new geography is a challenge, but Foxconn is committed to investing in India,’ the company said in a statement posted on Twitter
- Neither Foxconn nor Vedanta had experience in chip making, and they failed to source a suitable tech partner for their 28-nanometre chip fab, said India’s IT minister
Foxconn Technology Group, Apple’s largest contract manufacturer and a symbol of the global hi-tech supply chain, has pledged to go ahead with its chip-making plan in India, a day after quitting a joint venture with local partner Vedanta.
The Taiwanese electronics manufacturing giant said on Tuesday that it was “committed to India and sees the country successfully establishing a robust semiconductor manufacturing ecosystem”, and that it plans to submit an application under a New Delhi plan to cover up to half of the costs of chip making projects.
“Building fabs from scratch in a new geography is a challenge, but Foxconn is committed to investing in India,” it said in a statement posted on Twitter. The company added that it was “actively reviewing the landscape for optimal partners”, hinting that it was open to working with others on a semiconductor project in India.
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“Foxconn has determined it will not move forward on the joint venture with Vedanta,” the company, formally known as Hon Hai Technology Group, said in a filing to the Taiwan Stock Exchange on Monday evening. “Foxconn is confident about the direction of India’s semiconductor development.”
Vedanta also reiterated its commitment to the chip project, saying it had lined up other partners to continue its efforts to build the country’s first semiconductor foundry.
Neither Foxconn nor Vedanta had experience in semiconductor manufacturing, and they failed to source a suitable technology partner for the 28-nanometre chip fab they originally proposed, according to Rajeev Chandrasekhar, Minister of State for Electronics and Information Technology.
Vedanta, however, recently resubmitted a proposal for a 40-nm fab with a new tech partner, which is under evaluation from the country’s industry advisory group, Chandrasekhar said on Tuesday.
Foxconn’s withdrawal had “no impact on India’s semiconductor fab goals”, Chandrasekhar added.
India has been working to expand its presence in the global semiconductor supply chain, which is considered core to the country’s economic development plan to become a new global manufacturing hub.
US memory chip firm Micron Technology recently announced it would invest US$825 million to set up a new chip assembly and test facility in Gujarat, a state on India’s Western coast.
The joint venture between Foxconn and Vedanta had been seen as a crucial piece of the “Make in India” campaign, which was Indian prime minister Narendra Modi’s ambitious plan to boost domestic manufacturing amid an environment where global companies are looking to diversify their production away from China after three years of Covid-19 disruptions and a deteriorating Sino-US geopolitical relationship.
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Apart from the chip joint venture, Foxconn has also pledged to make more of Apple’s iPhones in India. In May, it purchased 1.2 million square metres of land near Bangalore city in Karnataka. Manufacturing is expected to start in April next year, with the investment creating 5,000 jobs, the state government said last month. Foxconn has also invested US$500 million in a facility in Telangana to produce AirPods and other Apple products, according to a June statement by the local government.
The number of Apple production sites in India increased to 14 last year, compared with 11 in 2021, according to the company’s latest supplier list, signalling the iPhone maker’s accelerated expansion in the country.
