Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), yesterday said that it has withdrawn from a US$19.5 billion semiconductor joint venture with Indian metals-to-oil conglomerate Vedanta Ltd, in a setback to Indian Prime Minister Narendra Modi’s chipmaking plans for India.
Hon Hai, the world’s largest contract electronics maker, and Vedanta signed a pact last year to set up semiconductor and display production plants in Modi’s home state of Gujarat.
“Foxconn has determined it will not move forward on the joint venture with Vedanta,” the electronics maker said in a statement, without elaborating on the reasons.
Photo: Carlos Garcia Rawlins, Reuters
It said it had worked with Vedanta for more than a year to bring “a great semiconductor idea to reality.”
However, they had mutually decided to end the joint venture and it will remove its name from what now is a fully-owned Vedanta entity, Foxconn said.
Vedanta and India's IT ministry did not reply to requests for comment.
Foxconn is best known for assembling iPhones and other Apple Inc products, but in recent years it has been expanding into chips to diversify its business.
Reuters has previously reported that Modi's plan was in trouble, with the Vedanta-Foxconn project proceeding slowly as their talks to involve European chipmaker STMicroelectronics NV as a partner were deadlocked.
Vedanta-Foxconn had got STMicro on board for licensing technology, but India's government had made clear it wanted the European company to have more "skin in the game," such as a stake in the partnership.
STMicro was not keen on that and the talks remained in limbo, a source had previously said.
India, which expects its semiconductor market to be worth US$63 billion by 2026, last year received three applications to set up plants under a US$10 billion incentive scheme.
These were from the Vedanta-Foxconn joint venture, Singapore-based IGSS Ventures Pte Ltd and global consortium ISMC, which counts Tower Semiconductor Ltd as a tech partner.
The US$3 billion ISMC project has also stalled due to Tower being acquired by Intel Corp, while another US$3 billion plan by IGSS was halted as the firm wanted to resubmit its application.
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