‘India just getting started’: Minister as Foxconn dumps $19.5 billion chip plan

By India Today Business Desk: Taiwan’s Foxconn’s decision to withdraw from a $19.5 billion semiconductor joint venture with Indian conglomerate Vedanta “has no impact on India’s Semiconductor Fab goals”, the government said today, adding that it was “a bad idea to bet against India under PM Modi”.

Foxconn, the world’s largest contract electronics maker, and Vedanta had signed a deal last year to build semiconductor and display production plants in Prime Minister Narendra Modi’s home state of Gujarat.

Here are the latest developments in this big story:

  • Foxconn, in a statement today, said that it was “determined it will not move forward on the joint venture with Vedanta”, without elaborating on the reasons.

  • The company said it had worked with Vedanta for more than a year to bring “a great semiconductor idea to reality”, but they had mutually decided to end the joint venture and it will remove its name from an entity that is now fully owned by Vedanta.

  • The Vedanta-Foxconn joint venture was aimed at setting up India’s first semiconductor production plant, a display fab unit, and a semiconductor assembling and testing unit on 1000-acre of land in Ahmedabad.

  • Reacting to the development, Union Minister Rajeev Chandrasekhar, in a tweet, said that it wasn’t the government’s place to “get into why or how two private companies choose to partner or choose not to”. He added that in simple terms, it meant that “both companies can & will now pursue their strategies in India independently, and with appropriate technology partners in Semicon n Electronics (sic)”.

  • Prime Minister Modi had called the Vedanta-Foxconn venture “an important step” in boosting India’s chipmaking ambitions as the deal was announced in Gujarat last September. The pact was seen as a major fillip to PM Modi’s ‘Make in India’ plans and the government’s push to make chipmaking a top priority.

  • Rejecting talk that Foxconn’s move was a blow to India’s indigenous semiconductor industry plans, Rajeev Chandrashekar tweeted, “To those editorializing abt this decision of Foxconn/Vedanta being a “blow” to Indias Semicon ambition , I can only say its a bad idea to bet against India under PM Modi. India is just getting started (sic).”

  • The minister also said that “India’s strategy of catalyzing Semiconductor Ecosystem has seen rapid progress in the 18 months since PM @narendramodi ji approved Indias Semicon strategy n policy”.

  • Foxconn, best known for assembling iPhones and other Apple products, said it was “confident about the direction of India’s semiconductor development”, adding that it will “continue to strongly support the government’s ‘Make In India’ ambitions and establish a diversity of local partnerships that meet the needs of stakeholders”.

  • The government has said it remains confident of attracting investors for chipmaking. Micron last month said it will invest up to $825 million in a chip testing and packaging unit, not for manufacturing. With support from the government and Gujarat, the total investment will be $2.75 billion.

  • India, which expects its semiconductor market to be worth $63 billion by 2026, last year received three applications to set up plants under a $10 billion incentive scheme aimed at reducing dependence on imports from nations like Taiwan and China.

(With inputs from agencies.)

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