In a significant blow to Vedanta Ltd, the Taiwan-based electronics manufacturing giant Foxconn on Monday (July 10) announced its decision to withdraw from a joint venture (JV) for semiconductor production in India.

The partnership between Foxconn and Vedanta, a prominent metals-to-oil conglomerate, was established with the objective of setting up semiconductor and display production plants in Gujarat, India.

The move comes as a setback to India's aspirations of becoming a prominent player in the global electronics industry.

Last year, Foxconn and Vedanta had entered into a pact to invest $19.5 billion in the development of the semiconductor and display production facilities. The joint venture was expected to leverage India's ambitions to emerge as a major hub for electronics manufacturing.

However, Foxconn has now expressed its intention to disassociate itself from the project, stating that it is working towards removing the Foxconn name from the entity, which has since become fully owned by Vedanta.

"Foxconn is working to remove the Foxconn name from what now is a fully-owned entity of Vedanta," the electronics manufacturer said in a statement.

Foxconn mentioned that it had collaborated with Vedanta for over a year to bring "a great semiconductor idea to reality". However, both parties have now mutually agreed to terminate the joint venture.

Despite this setback, Vedanta remains fully committed to its semiconductor fab project and has lined up other partners to establish India's first foundry.

"Fully committed to its semiconductor fab project. We have lined up other partners to set up India's first foundry, and will shortly acquire a license for production-grade 28 nm," it said.

In a post earlier, after the announcement of the collaboration, Anil Agarwal, the Chairman of Vedanta, took to LinkedIn to express his excitement. Agarwal promised that the plant would help make semiconductors more affordable, stating, "And soon, you will be able to afford them at half the price!"

He urged Indian youth to seize the opportunity and aspire to become "chip makers" rather than merely "chip takers."

Agarwal further emphasised the significance of the project, stating, "We have been working on this project for the last 10 years, and are finally one step closer to India's own Silicon Valley".

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First Published:Jul 10, 2023 5:26 PM IST