Taiwanese electronics manufacturer Foxconn is scrapping its plans for a joint venture with Indian company Vedanta. These two companies were going to produce chips together in India, but according to Foxconn, after mutual consultation, they decided to end the collaboration.
Foxconn and Vedanta announced the end of the joint venture on Monday, writes Reuters news agency. Foxconn has said it has decided to end the joint venture. The company will remove its name from an ‘entity’, which will now be fully owned by Vedanta. That company says it remains committed to the semiconductor project and has found “other partners” to set up its first Indian foundry. However, it is not known which partners this specifically concerns.
According to Reuters sources, Foxconn is pulling out due to delays in subsidy approval by the Indian government. The government is also said to have raised questions about the cost estimates provided to receive such subsidy. The government of India wants to become a bigger player in the chip market and has a subsidy package totaling approximately 8.3 billion euros for various semiconductor projects.
Foxconn and Vedanta signed an agreement last year to build chip factories together. Vedanta would become 60 percent owner of the joint venture; the remaining 40 percent would have ended up in the hands of Foxconn. The joint venture would have involved a total investment of $19.5 billion. Foxconn wanted to expand its work to other sectors with the collaboration; The company is currently best known as an electronics manufacturer of, among other things, Apple’s iPhones. The company also wants to focus more on producing EVs and announced last month that it would jointly make car chips with Stellantis.