Foxconn exits $19 billion semiconductor JV with Vedanta
Vedanta Share price dropped by 2% during early trading on July 11th following an announcement by Taiwan's multinational electronics manufacturing company, Foxconn. Foxconn recently announced its decision to cancel the $19.5 billion semiconductor joint venture with Vedanta, a conglomerate involved in various industries.
The joint venture aimed to establish semiconductor and display manufacturing facilities in Gujarat, India, and was seen as a significant step towards India's semiconductor fabrication goals. However, Foxconn's withdrawal has raised concerns about the future of the project.
While the exact reason behind Foxconn's decision to withdraw was not disclosed, the company mentioned its ongoing efforts to dissociate its name from the joint venture, which now exclusively belongs to Vedanta. Last year, Foxconn and Vedanta entered into an agreement to establish semiconductor and display manufacturing facilities in Gujarat.
Following Foxconn's withdrawal, Vedanta has announced that it is in discussions with other potential partners to establish manufacturing units. The company remains committed to the semiconductor fab project and plans to expand its semiconductor team. Vedanta already possesses a license for 40 nm production-grade technology and aims to acquire a license for 28 nm technology.
Foxconn, known for assembling Apple iPhones, expressed confidence in India's semiconductor development and reiterated its commitment to supporting the government's "Make In India" initiative. However, the withdrawal of Foxconn from the joint venture has raised concerns about the project's future and its impact on India's semiconductor fabrication goals.
It is worth noting that Foxconn's decision to withdraw came shortly after Vedanta's board of directors approved the acquisition of a 100% stake in Vedanta Foxconn Semiconductors (VFSPL) and Vedanta Displays Limited (VDL) through share transfer at face value. Both VFSPL and VDL are wholly-owned subsidiaries of Twin Star Technologies Limited (TSTL), owned by Volcan Investments Limited, the ultimate holding company of Vedanta Limited.
The Union Minister of State for Electronics and IT, Rajeev Chandrasekhar, has provided reassurance that Foxconn's withdrawal will not hinder India's semiconductor fabrication goals. He has stated that India will continue to pursue its plans in this area without any setbacks. The government remains committed to advancing the semiconductor industry and is actively seeking alternative partners to ensure the successful establishment of a semiconductor foundry in the country.
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