Foxconn, a supplier for Apple, has decided to cancel its $19.5 billion (£15.2 billion) agreement with Indian mining company Vedanta to construct a chip manufacturing facility in India.
Less than a year after the initial announcement of plans to establish the facility in Prime Minister Narendra Modi’s home state of Gujarat, Foxconn and Vedanta have abandoned their joint venture. This development is seen by some analysts as a setback to India’s technology industry goals. However, a government minister assures that the country’s chip making ambitions will not be affected.
In a statement, Foxconn, headquartered in Taiwan, acknowledged that both parties recognized the project’s lack of progress. They cited challenging gaps and external issues unrelated to the venture as factors that hindered its smooth execution.
Foxconn emphasized that the decision to withdraw was reached through mutual agreement with Vedanta, which has now assumed complete ownership of the venture. The company also expressed continued support for the Indian government’s “Make in India” aspirations.
Vedanta, based in New Delhi, stated that it has identified other partners to establish India’s first chip foundry, indicating its commitment to pursuing alternative avenues.
“The main reason for the withdrawal appears to be the absence of a clear technology partner and a defined path for the joint venture,” he added. “Neither party possessed significant experience in developing and managing a large-scale semiconductor manufacturing operation.”
India’s Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar, stated on Twitter that Foxconn’s decision would not impact India’s semiconductor fabrication goals. He mentioned that both Foxconn and Vedanta were esteemed investors in the country who would now pursue their independent strategies in India.
The Indian government has been actively implementing strategies to support the chipmaking industry. It established a $10 billion fund last year to attract more investors to the sector, aiming to reduce dependency on foreign chipmakers.
Prime Minister Modi’s flagship initiative, the ‘Make in India’ program launched in 2014, seeks to transform the country into a global manufacturing hub to rival China. In recent years, numerous other companies have announced plans to construct semiconductor factories in India.
Just last month, US memory chip giant Micron revealed its intention to invest up to $825 million in building a semiconductor assembly and test facility in India. Micron stated that construction of the new facility in Gujarat would commence this year, creating up to 5,000 direct job opportunities and an additional 15,000 jobs in the area.
