Foxconn Abandons $19.5 Billion Investment in Vedanta Semiconductor Project in India
In a setback to Prime Minister Narendra Modi’s chipmaking plans for India, Taiwanese company Foxconn announced on Monday that it has pulled out of a $19.5 billion joint venture with Indian conglomerate Vedanta, which focuses on metals-to-oil industries.
Foxconn, which did not say why it had made the decision, and Vedanta signed an agreement last year to set up semiconductor and display manufacturing facilities in Modi’s home state of Gujarat.
“Foxconn has decided not to move forward with the joint venture with Vedanta. Foxconn is seeking to remove the Foxconn name from the Vedanta wholly-owned entity,” it said in a statement.
Modi has made chipmaking a priority of India’s economic strategy as he seeks a “new era” in electronics manufacturing, and Foxconn’s move is a blow to his goal of attracting foreign investors to make chips locally for the first time.
Vedanta did not immediately respond to a request for comment.
Reuters has previously reported that Modi’s plan was in trouble as the Vedanta-Foxconn project progressed slowly as their talks to partner European chipmaker STMicroelectronics stalled.
Vedanta-Foxconn had engaged STMicro to license the technology, but the Indian government had made it clear that it wanted the European company to have more “skin in the game”, such as a stake in the partnership.
STMicro was not interested in it and negotiations remained unclear, the source had previously said.
