NEW DELHI: In a setback to the Centre’s efforts to draw investment in the semiconductor sector and make India a chip-manufacturing hub, Taiwan-based electronic giant Foxconn on Monday pulled out of its joint venture with Vedanta.
The development comes in the wake of the joint venture’s failure to onboard a technology partner to manufacture nano chips. According to industry sources, high-cost estimates and the government’s own delay in approving incentives also influenced Foxconn’s decision.
The JV had initially submitted an application to manufacture 28-nanometre chips, but the government rejected it as the JV could not source a tech partner. The venture later filed an application for 40-nm chips, which is being evaluated.
Foxconn, the contract manufacturer of Apple’s iPhones, and Anil Agarwal’s Vedanta last year announced Rs 1.6 lakh crore investment to set up semiconductor and display production plants in Gujarat. They formed a joint venture with Vedanta holding a 60 per cent stake and Foxconn the rest. Last week, Vedanta took full ownership of the JV.
“Foxconn is working to remove the Foxconn name from what now is a fully-owned entity of Vedanta,” a Foxconn statement read. The company, though, maintained that it will continue to support the country's 'make-in-India' ambitions.
Meanwhile, Vedanta claimed it has lined up other partners. “We will continue to grow our semiconductor team, and we have the licence for production-grade technology for 40 nm from a prominent integrated device manufacturer,” said a Vedanta spokesperson, adding that the company will shortly acquire a licence for production-grade 28 nm as well.
Meanwhile, the government said the pullout won’t impact India’s semiconductor journey. Telecom minister Ashwini Vaishnaw said both firms remain committed to India’s semiconductor mission and 'make-in-India' programme.