Foxconn will break its promise to build India’s largest plant

Foxconn said it has finished an ambitious initiative to assist in the construction of India’s first chip facility. The biggest producer of contract electronics in the world said on Monday that it will “no longer pursue” a $19.4 billion joint venture with India’s Vedanta (VEDL), the third-largest economy in Asia, a metals and energy company.

The revelation was seen as a setback for the Indian government’s intentions to make India a global leader in the development of technology, but authorities are working to dispel that notion.

One of Apple’s key suppliers, the Taiwanese tech giant Foxconn, stated in a statement to CNN that the decision was made “mutually” and that the business was “exploring more varied growth options.” to do,” he added. Vedanta will now own the whole joint venture.

Foxconn restated its commitment to investing in chip manufacturing in India in a follow-up statement on Tuesday and said it will apply for a government programme to subsidise the cost of establishing a semiconductor and electronic display manufacturing plant in India. rice paddock. The business claimed, referring to its production facility (a colloquialism for semiconductor plants), that “Embracing new regions is a challenge, but Foxconn is fully committed to investing in India.”

In the statement, it was said that “both sides recognised that the project was not moving quickly enough, that there were challenging gaps that could not be filled easily, and that there were external issues unrelated to the project.”

Foxconn said that it has been collaborating with Vedanta on plans to develop a semiconductor fab in the nation that would support a larger ecosystem of manufacturers ever before the contract was announced in February 2022.

The amount spent on the plant was not made public, but Indian Prime Minister Narendra Modi tweeted in September that it totaled $16.4 billion at the time, or 1.54 trillion rupees. Young Liu, the CEO of Foxconn, visited India in February in search of new business partners. Since then, he has been wooing Indian partners.

 

Many international technology businesses are looking at prospects in India, particularly as multinationals try to diversify their supply chains outside of China. The company currently has plants in the Indian states of Andhra Pradesh and Tamil Nadu. one of the businesses.

Ashwini Vaishnau, India’s Minister of Electronics and Information Technology, said on Monday that Vedanta and Foxconn are “committed to India’s semiconductor mission,” according to News 18 of India, a CNN affiliate. In a previous statement, Foxconn said that it was actively looking for a location for the facility and had spoken with “some state governments.”

Rajeev Chandrasekhar, the nation’s Minister of State for Electronics and IT, also tweeted that the decision “will continue to ensure that both companies have their own semiconductor manufacturing goals” and that the announcement “does not change India’s semiconductor manufacturing goals.” It will enable us to carry out our plan, he continued.

The undertaking has been lauded as a turning point in India’s effort to increase industrial investment, which is sorely needed to reduce unemployment. According to Modi, the initiative will create a lot of employment and help the economy.

Following the news on Tuesday, Foxconn stock rose 1.3 percent in Taipei while Vedanta stock declined 1.4 percent. A request for feedback from the latter received no response. Recent initiatives to increase manufacturing in India have also been made by other significant IT corporations.

The establishment of a new plant in the western state of Gujarat, allegedly the nation’s first semiconductor assembly and test manufacturing facility, was announced by US semiconductor manufacturer Micron (MICR) last month.

The business claims that over the next five years, Micron plans to spend up to $825 million and generate “up to 5,000 new Micron direct jobs and 15,000 new community jobs.” It reads.

The largest manufacture of semiconductor chips in India is presently being moved back by Foxconn, but this might cause external issues, the facility would take a long time to build up from scratch, and they would still be unable to meet the existing deficit.