Foxconn withdraws from its semiconductor joint venture with Indian conglomerate Vedanta

Taiwan-based Hon Hai Technology Group, better known as Foxconn, had pulled out of its joint venture with the Vedanta Group on July 10, 2023. File
| Photo Credit: Reuters

Taiwan-based Hon Hai Technology Group (better known as Foxconn) on Tuesday (July 11) said that it intended to submit an application under the modified Production-Linked Incentive (PLI) scheme for semiconductors, a day after it announced the end of its joint venture (JV) with the Vedanta Group to build a $19.5 billion semiconductor plant in Gujarat. 

“Foxconn is working toward submitting an application related to the ‘Modified Programme for Semiconductors and Display Fab Ecosystem,’” the firm said in an FAQ document shared with the media on Tuesday (July 11). Foxconn will require partners as it does not itself possess chip technology as a contract manufacturer. It is unclear if it has found any such partners yet.

‘Welcome partners’

“We understand there is a lot of interest in Foxconn’s plans and India’s information ecosystem is porous,” the company said, adding that it maintained open lines of communication with the government leading up to the breakdown of the deal. “However, due to the competitive and sensitive issues involved in negotiating large scale investments, Foxconn is unable to disclose more information at this time.”

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“We welcome a diverse set of stakeholders, both inside India and abroad, who also want to see India get to the next level and can complement Foxconn’s world class supply chain management and manufacturing efficiency,” the company said. “Building fabs from scratch in a new geography is a challenge, but Foxconn is committed to invest in India,” it added.

‘External issues’

Foxconn blamed its calling off of the JV (“after heavy considerations”) on “challenging gaps we were not able to smoothly overcome, as well as external issues unrelated to the project”. Media reports cited demands by the government that the technology provider for the JV — neither Foxconn nor Vedanta had the tech and would have had to license it — also be an investor in the undertaking, which could not happen.