Foxconn Withdraws from $19.5B Chip Joint Venture with India’s Vedanta

Foxconn International, which is known as Hon Hai Precision Industry Co., Ltd. in China and Taiwan, has pulled out from its joint venture deal with Vedanta Limited, a leading natural resources conglomerate in India.

The Taiwanese semiconductor firm withdrew from its $19.5 billion project, and this turn of events was described as a huge blow to Prime Minister Narendra Modi's chip manufacturing plans for his country. According to Reuters, Foxconn did not say why it made this decision despite the fact that it already signed an agreement with Vedanta last year to build a chip and display manufacturing facility in India’s state of Gujarat.

Moreover, it was reported that the country’s prime minister has made chipmaking a top priority as part of his economic strategy for India. He is pushing forward with his plan of making a "new era in electronics manufacturing, but with Foxconn's withdrawal, his ambition of attracting foreign investors for chip production has been shattered. This would have been the very first local chip production in India, but the project has failed.

"Foxconn has determined it will not move forward on the joint venture with Vedanta,” the chip maker said in a statement regarding its pull out from the chipmaking joint venture. “Foxconn is working to remove the Foxconn name from what now is a fully-owned entity of Vedanta."

CNBC reported that Foxconn said its move to drop out was a “mutual agreement” with Vedanta. While it will no longer continue with the JV, it remained confident that India will be able to achieve its semiconductor ambitions.

Foxconn is a known supplier of chips, and Apple is one of its major clients. It is working to further its reach and diversify its supply chains beyond mainland China. It was noted that the company already has several factories across India, but its canceled venture with Vedanta would have been one of its largest projects.

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