In a major setback to Modi government’s plans to manufacture chips in India, Taiwan-based contract manufacturer Foxconn reportedly pulled out of its joint venture (JV) with Indian conglomerate Vedanta. The JV was expected to build a chip manufacturing facility and a display fab, in Gujarat, at an estimated cost of $19.5 billion.
"Foxconn is working to remove the Foxconn name from what now is a fully-owned entity of Vedanta,” Foxconn said in a statement, according to Reuters. Vedanta did not comment on the matter yet.
Earlier, Vedanta owned a 63 per cent stake in the JV with the rest of it owned by Taiwan's Hon Hai Precision Industry Co. Ltd, better known as Foxconn.
Just last week, there was a change in the ownership structure of Vedanta Foxconn Semiconductor Ltd (VFSL), the JV between Vedanta group and Foxconn. In the ownership shuffle, Vedanta Ltd took over the stake of Twin Star Technologies Limited, a subsidiary of Vedanta’s ultimate holding company.
This was following a Rs 30 lakh fine that was levied on the Anil Agarwal-led conglomerate for violating the listing and disclosure norms of market regulator SEBI (Securities and Exchange Board of India).
Last year, VFSL became one of the first applicants under the Centre’s ambitious Semicon India programme that had promised subsidies up to $10 billion for setting up chip manufacturing facilities in India.
Although its initial application failed to go through, VFSL submitted a new proposal which is currently being appraised by the Centre. Now, with Foxconn out of the JV, it remains to be seen whether Vedanta can keep India’s semiconductor fab aspirations alive.
