Foxconn seeks India incentives on chip factory, cancels $19.5 billion Project with Vedanta

Leading Apple supplier Foxconn has canceled its $19.5 billion semiconductor venture in India in a major twist that could delay the Modi-led country’s ambitions to speed up major tech projects. The Taiwan-based company was supposed to kick off its groundbreaking chip and display manufacturing project with the Indian conglomerate Vedanta in Gujarat but the company might seek the venture by itself.

“Foxconn has determined it will not move forward on the joint venture with Vedanta,” Foxconn said to US media CNBC. Experts have declared that it could be a major blow to the Modi-led government which has forwarded the “Make in India” vision seeking foreign tech multinationals’ investment in the country, a move to ward off the influence of China.

But it may not mean the end of the milestone project. The chipmaker has said, “Foxconn is working toward submitting an application related to Modified Programme for Semiconductors and Display Fab Ecosystem. We have been actively reviewing the landscape for optimal partners.”

However, Foxconn has apparently discarded the multi-billion-dollar project. The company said the decision followed a mutual agreement and expressed a firm belief that India’s desire to be a semiconductor powerhouse would become a reality. Indian firm though has not passed a comment on it.  

In recent years, US tech firms particularly such as Apple have tried to get beyond mainland China to diversify their supply chains over political scuffles. And India was seen as a potential option given India’s Modi-led government’s Make in India vision. In fact, Foxconn which is a key Apple supplier has cooperated on many factories in parts of India such as one in Telangana, and one in Bengaluru while the chip collaboration with Vedanta would have been the most significant.   

Meanwhile, foreign companies such as Cisco and Zoom have announced their plans in India.

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Foxconn to go separately!

The semiconductor giant is, in fact, seeking its separate bid for chip business in India and is expecting incentives the government is offering for the firms in the country under its compelling semiconductor manufacturing policy.

The company will apparently apply for the “Modified Programme for Semiconductors and Display Fab Ecosystem”. The Modi government is offering incentives of a 50% maximum capital cost for semiconductor and display manufacturing undertakings.

“Foxconn is working toward submitting an application. It is committed to India and sees the country successfully establishing a robust semiconductor manufacturing ecosystem,” the company said in a statement.

Despite pulling out of the Vedanta cooperation, Foxconn assured that it has no impact on its India plans and might even seek other partners to lead further.

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