Vedanta shares experienced a nearly 3% decline following Foxconn’s withdrawal from their $19.5 billion semiconductor joint venture. Vedanta states that it has secured alternative potential partners.
In 2022, Foxconn and Vedanta unveiled plans for a joint venture aimed at semiconductor manufacturing in Gujarat, India.
Vedanta shares experienced a nearly 3% decline during Tuesday’s morning trading session on the BSE. This drop came after Foxconn, a Taiwan-based company, announced its decision to withdraw from a $19.5 billion semiconductor joint venture with Vedanta. The stock opened at ₹275, lower than the previous close of ₹282.25, and quickly fell by 2.6% to ₹274.90. By around 10:15 am, the stock was trading 1.26% lower at ₹278.70.
Foxconn, the Taiwan-based Hon Hai Technology Group, and Vedanta, the metals and mining conglomerate of India, made a joint announcement in 2022 regarding their plans to establish a semiconductor manufacturing joint venture in Gujarat, India. As per the memorandum of understanding (MOU) signed between the two companies, Vedanta was slated to hold the majority stake in the joint venture.
In a statement on July 10, 2023, Foxconn announced that it had made the decision not to proceed with the joint venture alongside Vedanta, citing the intention to explore a wider range of development opportunities.
“Foxconn has stated that it is in the process of removing the Foxconn name from an entity that is now fully owned by Vedanta.”
According to sources cited in a Reuters report, concerns regarding delays in receiving government incentives were a contributing factor to Foxconn’s withdrawal from the venture. The Indian government in New Delhi had also raised multiple questions regarding the cost estimates submitted to request incentives.
In the meantime, Ashwini Vaishnaw, the Minister for Railways, Communications, Electronics & Information Technology, took to Twitter to express that both Foxconn and Vedanta remain committed to India’s semiconductor mission and the Make in India program.
