Foxconn withdraws from the $19.5
Vedanta: According to Foxconn, the joint venture with Vedanta will not proceed. According to a statement from Foxconn, the company is working to get its name taken off of what Vedanta now fully owns.
As Foxconn announced on Tuesday morning that it is ending a $19.5 billion joint venture with Vedanta Limited, which was founded to create semiconductors in India, Vedanta will continue to be in the public eye. Anil Agarwal’s business, according to a Vedanta spokesperson, is fully dedicated to its semiconductor fab project and has lined up other partners to launch India’s first foundry.
Foxconn stated on Monday that it will not proceed with the joint venture with Vedanta. A statement mentioned that Foxconn is now working on removing the name “Foxconn” from the fully-owned unit of Vedanta.
“We will continue the development of our semiconductor team, and we have a license for production-grade technology up to 40nm from a leading integrated device manufacturer (IDM). We will soon obtain a license for production-grade 28nm as well. Vedanta has doubled its efforts to fulfill the Prime Minister’s vision for semiconductors and has become crucial in reestablishing India’s global semiconductor supply chains,” said a spokesperson for Vedanta.
Vedanta’s shares fell 11% year over year during this time, compared to a 1.58% decrease in the BSE Metal Index.
The Vedanta story broke when the company declared on Friday that it would acquire a stake in a joint venture that it had formed with Taiwan’s Foxconn to produce semiconductors.
Vedanta’s board approved the acquisition of 100% ownership through share transfers at the marked price on Friday, for subsidiary companies Twin Star Technologies Limited, Vedanta Foxconn Semiconductor Private Limited, and Vedanta Display. Vedanta Limited is the ultimate holding company of TSAT Vedanta Limited.
Vedanta Foxconn JV recently refiled an application to set up an electronic chip manufacturing facility under the modified production-linked incentive (PLI) program.
Under the modified program, the government has increased the financial incentives for setting up semiconductor fabs in India up to 50% of the project cost for any node of semiconductor. Similarly, financial incentives up to 50% of the project cost are available for setting up display fabs for specified technologies in India.
Foxconn withdraws from the $19.5
Vedanta JV wanted to manufacture 40nm chips and then go down to 28nm on the factory line with a capacity of 40,000 wafers per month. It intended to invest INR 1.54 lakh crore in setting up consortia of display and semiconductor fabrication units.
According to Morgan Stanley’s note on July 3, JV was seeking a third equity partner. The report mentioned that there were also discussions about a possible joint venture with consortium STMicroelectronics to make Vedanta a technology partner.
“However, talks have reportedly stalled as STMicroelectronics wants to limit the scope of technology transfer and wants a sunset clause (5-10
years) with respect to the duration of Vedanta’s link. STMicroelectronics also wants Vedanta Group to contribute more equity to the investment,” Morgan Stanley said on July 3. The applicant should have either a manufacturing unit for semiconductor chips (in the range of 65-28nm) or possess production-grade licensed technology for making 28nm chips, to receive government approval.
More about Foxconn
Founded in Taiwan in 1974, Hon Hai Precision Industry Co., Ltd., also known as Foxconn globally and as Hon Hai Technology Group in China and Taiwan, is a multinational electronics contract manufacturer with headquarters in Tucheng, New Taipei City, Taiwan. The company had yearly sales of 5.99 trillion New Taiwan dollars (US$175 billion) in 2021, and it was included as the 20th largest company in the Fortune Global 500 for 2022. It is the biggest manufacturer and service provider of technology in the world. Despite having its headquarters in Taiwan, the corporation, one of the biggest employers globally, derives the majority of its revenue from assets on the Chinese mainland.The company’s founder and previous chairman is Terry Gou.