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Foxconn looking to set up 4-5 fab lines in India



Foxconn has informed the Indian government that it intends to establish at least four to five semiconductor fabrication lines in the country, according to ET.


Foxconn stated in a separate statement on Tuesday that it was "working towards submitting an application" under the India Semiconductor Mission.


This came one day after it announced the end of its chip-making joint venture with the Vedanta Group, Vedanta-Foxconn Semiconductors Ltd (VFSL).


According to a senior government official, the Taiwanese company has apprised the ministry of electronics and information technology of the details of at least two memorandums of understanding (MoU) it has signed with technology partners.


The official stated that the tech partner is likely to hold equity in the new partnership. "Since Foxconn is familiar with the procedures, they should be able to submit their final application and make an official announcement within 45 to 60 days."


While at least one of these production lines is likely to be established in Gujarat, Foxconn may also consider other locations, according to a second source with knowledge of the situation.


"We welcome a diverse group of stakeholders, both inside and outside of India, who share our desire to see India reach the next level and who can complement Foxconn's world-class supply chain management and manufacturing efficiency," the company stated without further explanation.


The adversity of the joint venture was reported by ET on June 26. ET reported, citing sources, that Foxconn had reached out to other Indian conglomerates for a potential partnership in semiconductor manufacturing.


Foxconn proclaimed the end of the joint venture on July 10 and stated that the split was mutually agreed upon. The company stated that it was attempting to have its name removed from the joint venture. It cautioned that any attempt to retain the original name of the joint venture would "confound future stakeholders."


Cultural differences accounted for the disparities between the two companies, according to those with knowledge of the situation. Foxconn is an Asia-focused high-tech organisation. Vedanta is engaged in mining and metals. There were also concerns regarding Vedanta's large debt load, according to the aforementioned sources. These had been communicated to the Indian delegation as well as senior government officials, they said.


Foxconn stated in its statement on Tuesday that it would not be required to record any losses associated with the joint venture because it has not "injected capital or fixed assets."


In February 2022, Hon Hai Technology Group (Foxconn) and Anil Agarwal-led Vedanta announced their joint venture to manufacture chips and display panels in India, making it one of the first few participants in the India Semiconductor Mission, which the government conceived as part of a plan to develop a national chip industry.


Vedanta stated during the signing of the memorandum of understanding with the state government that the project would require an investment of $18 billion (Rs 1,54,000 crore). Vedanta led the consortium with a 67% stake in VFSL, while Foxconn possessed the remaining 33%.


In December 2021, the Indian government announced a $10 billion (Rs 76,000 crore) initiative to promote the semiconductor industry in India. Under the programme, the federal government proposed incentives equal to fifty percent of the total cost of the undertaking. Governments of the states in which the units will be located are also providing support, bringing the total value of subsidies and incentives to a possible 70-75% of total costs.

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