Taiwan-based Foxconn on Monday announced its withdrawal from a $19.5 billion semiconductor joint venture with Indian conglomerate Vedanta. The partnership aimed to establish semiconductor and display production plants in Gujarat, as part of Prime Minister Narendra Modi’s chipmaking plans for India. However, Foxconn has decided not to proceed with the joint venture, without providing specific reasons. The move represents a setback for PM Modi’s ambitions to attract foreign investors for local chip manufacturing.
Vedanta is yet to comment on the development.
Foxconn, the world’s largest contract electronics manufacturer, has been diversifying its business by expanding into chip production. The Vedanta-Foxconn project faced challenges, including difficulties in involving European chipmaker STMicroelectronics as a partner. Talks between the parties were deadlocked as the Indian government sought greater involvement from STMicro, such as a stake in the partnership. STMicro was hesitant to meet these requirements, resulting in a stalemate.
India aims to tap into the growing semiconductor market, estimated to reach $63 billion by 2026. Under a $10 billion incentive scheme, the country received three applications to establish semiconductor plants, including the Vedanta-Foxconn joint venture, a consortium involving Tower Semiconductor, and a project by IGSS Ventures. However, the ISMC project worth $3 billion has also stalled due to Intel’s acquisition of Tower, while the $3 billion plan by IGSS was halted for application resubmission.