New Delhi- Foxconn on Monday said it has decided to pull out of semiconductor joint venture with Indian conglomerate Vedanta, according to a statement.
Foxconn said it is “working to remove the Foxconn name from what now is a fully-owned entity of Vedanta”.
“Foxconn has no connection to the entity and efforts to keep its original name will cause confusion for future stakeholders,” Hon Hai Technology group (Foxconn) said.
Foxconn, the global contract electronics maker, and Vedanta had inked an agreement last year to build semiconductor and display production plants in Gujarat entailing an investment of abour Rs 1.5 lakh crore.
In a statement on Monday Foxconn said: “In order to explore more diverse development opportunities, according to mutual agreement, Foxconn has determined it will not move forward on the joint venture with Vedanta.”
The statement said that for over a year Hon Hai Technology Group (Foxconn) and Vedanta have worked hard to bring a great semiconductor idea to reality. It has been a fruitful experience that can position both companies strongly going forward.
“Foxconn is confident about the direction of India’s semiconductor development. 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,” it said.
Meanwhile, Minister of State for Electronics and IT Rajeev Chandrasekhar saidthat Foxconn’s decision to pull out of Vedanta joint venture has no impact on India’s semiconductor fabrication plant goal.
“This decision of Foxconn to withdraw from its JV with Vedanta has no impact on India’s Semiconductor Fab goals. None,” Chandrasekhar tweeted.
“It’s not for govt to get into why or how two private companies choose to partner or choose not to, but in simple terms it means both companies can & will now pursue their strategies in India independently, and with appropriate technology partners in Semicon n Electronics,” Chandrasekhar tweeted.
The minister said that both Foxconn and Vedanta have significant investments in India and are valued investors who are creating jobs and growth.
“It was well known that both companies had no prior semicon experience or technology and were expected to source Fab tech from a Tech partner. While their JV VFSL had originally submitted a proposal for 28nm fab, they could not source appropriate Tech partner for that proposal,” the minister said.
He said that Vedanta through JV VFSL has recently submitted a 40 nm fab proposal backed by a technology licensing agreement from a Global Semicon major – which is currently being evaluated by government’s Semicon India Tech Advisory group.
The minister said that India’s strategy of catalyzing semiconductor ecosystem has seen rapid progress in the 18 months since Prime Minister Narendra Modi approved India’s Semicon strategy and policy.
“To those editorializing abt this decision of Foxconn/Vedanta being a “blow” to India’s Semicon ambition, I can only say its a bad idea to bet against India under PM Modi. India is just getting started,” Chandrasekhar tweeted.
Cabinet had approved Semicon India Program in December 2015 with an incentive outlay of Rs 76,000 crore.
Vedanta Foxconn JV, IGSS Ventures and ISMC propose to set up electronic chip manufacturing plants with USD 13.6 billion investment and have sought support of USD 5.6 billion from the Centre under the Rs 76,000 crore Semicon India Programme.
Vedanta and Elest have proposed to set up a display manufacturing unit with projected investment of USD 6.7 billion and have sought support of USD 2.7 billion from the Centre under the Scheme for setting up of Display Fabs in India.