Foxconn targets India’s chip today after splitting with Vedanta on a $19.5 billion chipmaking joint venture, Foxconn said it would apply for India’s semiconductor manufacturing plan incentives.
Foxconn targets India’s chip After it left the JV with the Indian metals-to-oil giant on Monday, derailing Prime Minister Narendra Modi’s chipmaking hopes for India.
On Tuesday, the world’s largest contract electronics maker said it was considering applying for India’s $10 billion Modified Programme for Semiconductors and Display Fab Ecosystem, which offers up to 50% capital cost incentives for semiconductor and display production projects.
“We have been actively reviewing the landscape for optimal partners,” it stated. “Foxconn is committed to India and sees the country successfully establishing a robust semiconductor manufacturing ecosystem.”
The Vedanta breakup is a setback for Modi, who has prioritized chipmaking in pursuit of a “new era” in electronics production and called the JV a “important step” last year. Foxconn will start over.
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Two anonymous sources said Foxconn is in talks with numerous local and international partners to build semiconductors in India utilizing mature chip manufacturing technologies for goods like EVs.
“The company will continue to be there, just that it will find other partners,” one person stated.
Modi’s ambition to make India’s semiconductor sector $63 billion by 2026 has failed.
Vedanta-Foxconn JV, Singapore-based IGSS Ventures, and global consortium ISMC, which includes Tower Semiconductor (TSEM.TA), sought for incentives last year, but no plan has been finalized.
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According to Reuters, Tower’s acquisition by Intel has postponed the $3 billion ISMC project, while IGSS’s $3 billion proposal was halted because it wished to re-submit.
Venture issues
Foxconn said “there was recognition from both sides that the project was not moving fast enough” and “challenging gaps we were not able to smoothly overcome” in explaining the Vedanta break.
“This is not negative,” Foxconn said.
The Vedanta-Foxconn JV pulled out due to blocked talks on finalizing European chipmaker STMicroelectronics (STMPA.PA) as a tech partner and delayed incentive approvals, according to Reuters.
On Tuesday, two individuals said Indian authorities and Foxconn were concerned about Vedanta’s finances, which contributed to the Taiwanese firm’s JV termination.
Due to dividend payments and capital expenditure outflows, Vedanta India’s net debt rose to 452.60 billion rupees ($5.5 billion) as of March 31, 2023.
Vedanta told Afriupdate that Vedanta Ltd. is in “a comfortable financial position” and there is “no basis” for conjecture. On Tuesday, India’s IT ministry declined comment.
This year, Moody’s downgraded Vedanta Resources, its London-based parent, and warned that continued financial concerns expose Vedanta “to material refinancing risks and exacerbate likelihood of a payment default or a distressed exchange”.
Vedanta Chairman Anil Agarwal claims no loan defaults.
The Indian government, like Foxconn, said the JV dissolution had “no impact” on semiconductor ambitions and that both companies were “valued investors” in the nation.
Foxconn’s Taipei-listed shares rose 0.5%, underperforming the market (.TWII). Vedanta’s Mumbai shares dipped 2.6% before recovering.
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