Why Foxconn Pulls Out $19.5 Bn JV Contract With Vedanta Group

Published  July 17, 2023   0
S Staff
Foxconn-Vedanta JV

As soon as possible Foxconn is likely to sign the contract to manufacture both advanced and legacy node chips in India

After desisting the $19.5 billion JV contract with Vedanta Group, the Taiwan based electronics contract manufacturer Foxconn is now reported to have several rounds of discussions with TSMC and Japan’s TMH group for technology partnerships. As per the report of the Economic Times, the discussions are being carried out by Foxconn to set-up semiconductor fabrication units in India. 

The report also added that as soon as possible Foxconn is likely to sign the contract to manufacture both advanced and legacy node chips in India. TSMC is currently the world’s largest chip foundry, while TMH provides semiconductor related services and solutions and maintenance of manufacturing devices. 

Currently, TSMC manufactures 50 percent of the world’s chips and towards the end of 2022, the company grabbed 33.5 percent escalation in revenue worth $75.88 billion. In fact, a year back, TSMC shipped 15.3 million 12-inch equivalent wafers compared to 14.2 million in 2021. TSMC manufactured chipsets are utilized by well-known global firms such as MediaTek, Apple, Broadcom, AMD, Nvidia, and Marvell.

A week back, the Taiwanese firm pulled out the contract with Anil Agarl owned Vedanta Group and mentioned that it is now looking for ample incentives under the government’s semiconductor production plan. In an effort to boost in-house semiconductor manufacturing, Vedanta announced its JV with Foxconn and it was one of the top five applicants looking for incentives under the government’s PLI scheme of Rs 76,000 crore announced in December 2021. 

When media approached Foxconn for detailed clarifications, its answers were very vague, but it stated that it is committed to set-up semiconductor manufacturing units in India and they are now in the process of looking for a suitable technology partner. In a statement, Foxconn said, “It is challenging to build fabs from scratch in a new geography, but Foxconn is committed to invest in India. We are working on such challenges since the 1980s. We 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."