Foxconn’s Withdrawal from Vedanta Joint Venture Has No Impact on India’s Semiconductor Goals, Says Union Minister

Foxconn’s decision to withdraw from its semiconductor joint venture with Vedanta Limited, led by Anil Agarwal, will not affect India’s semiconductor fabrication goals, according to Union Minister of State for Electronics and Technology, Rajeev Chandrasekhar. The joint venture between Foxconn and Vedanta had signed Memorandums of Understanding (MoUs) with the Gujarat government in September 2022 to establish a semiconductor and display manufacturing unit in the state, with an investment of over Rs 1.54 lakh crore. However, Foxconn has now chosen to withdraw from the partnership.

In a tweet on Monday, Minister Chandrasekhar stated that Foxconn’s decision will have no impact on India’s semiconductor fabrication goals. He emphasized that both Foxconn and Vedanta are significant investors in India, creating jobs and contributing to economic growth. It was already known that neither company had prior experience or technology in the semiconductor industry, and they were expected to source fabrication technology from a technology partner.

While the joint venture, VFSL, had initially proposed a 28nm fab, they were unable to secure an appropriate technology partner for that specific proposal. However, Vedanta, through VFSL, has recently submitted a proposal for a 40nm fab, supported by a technology licensing agreement from a global semiconductor major. This new proposal is currently being evaluated by a Technology Advisory Group.

Minister Chandrasekhar clarified that it is not the government’s role to delve into the private companies’ decision-making process regarding partnerships. He highlighted that both companies can now independently pursue their strategies in India, partnering with suitable technology companies in the semiconductor and electronics sectors.

India has been rapidly progressing in its efforts to catalyze the semiconductor ecosystem since Prime Minister Narendra Modi approved the country’s semiconductor strategy and policy 18 months ago. The government aims to transform India into a global manufacturing hub and a significant player in the semiconductor supply chain. Various initiatives have been undertaken to boost domestic manufacturing of electronic goods and reduce dependence on imports of electronic products, semiconductors, and components.

Minister Chandrasekhar addressed concerns that Foxconn’s withdrawal could be viewed as a setback to India’s semiconductor ambitions. He expressed confidence in India’s trajectory under Prime Minister Modi, stating that it would be unwise to bet against India. The country is just getting started on its journey to establish a strong presence in the semiconductor industry, backed by the government’s proactive support and strategic initiatives.

Leave a Reply

Your email address will not be published. Required fields are marked *