In a significant setback to Indian billionaire Anil Agarwal's ambitious plans to enter the semiconductor industry, Taiwanese partner Foxconn has decided to part ways with Vedanta Ltd. on a planned joint venture. Foxconn, also known as Hon Hai Technology Group, announced in a statement on Monday that it will not proceed with the project, citing a mutual agreement. The company also mentioned that it is working towards removing the Foxconn name from the entity, which is now fully owned by Vedanta.
The setback follows last week's announcement by Vedanta that it will acquire the semiconductor and display glass units from a group company. The delay in state financing for the chip venture has been a major obstacle in the company's entry into the electronics manufacturing sector. The Indian government had asked Vedanta and Foxconn to reapply for incentives as the original plan to produce 28 nanometer chips had changed.
According to Vedanta, Foxconn had eventually acquired manufacturing-grade technology for producing 40 nanometer chips. However, the company remains determined to pursue its semiconductor project and has already lined up other partners to establish India's first foundry. In a statement, Vedanta revealed that it already has a license for production-grade technology for 40 nm chips from a prominent integrated device manufacturer. They are also actively working towards acquiring a license for production-grade 28 nm chips.
India's minister of state for technology, Rajeev Chandrasekhar, took to Twitter to express that Foxconn's decision will have no impact on India's ambitions in the semiconductor industry.
The withdrawal of Foxconn from the joint venture is undoubtedly a setback for Anil Agarwal's plans, but Vedanta's commitment to the semiconductor project and their efforts to find alternative partners indicate that the ambitions of India's foray into chip manufacturing remain strong. It remains to be seen how Vedanta will navigate this setback and continue their pursuit of establishing a prominent presence in India's growing semiconductor industry.