Set Back For PM Modi's Chip-Making Ambition As Foxconn Dumps $19.5 Billion Deal With Vedanta

In a setback to Prime Minister Narendra Modi's chip-making ambition in India, Taiwan's Foxconn has withdrawn from a $19.5 billion semiconductor joint venture with Indian metals-to-oil conglomerate Vedanta, Reuters reported.

Foxconn, the world's largest contract electronics maker, and Vedanta signed a pact last year to set up semiconductor and display production plants in Modi's home state of Gujarat.

In a press release, the electronic major said, "Foxconn is working to remove the Foxconn name from what now is a fully-owned entity of Vedanta. Foxconn has no connection to the entity and efforts to keep its original name will cause confusion for future stakeholders."

Foxconn is confident about the direction of India's semiconductor development. "We will continue to strongly support the government's "Make In India" ambitions and establish a diversity of local partnerships that meet the needs of stakeholders," it added.

As per the deal, Indian conglomerate Vedanta and electronics manufacturing giant Foxconn were supposed to set up a semiconductor and display manufacturing facility in Gujarat.

At that time, the joint venture company had not disclosed the exact location of the facility.

"After a detailed site analysis in consultation with Gujarat government authorities, the joint venture entity of Vedanta and Foxconn has selected Dholera SIR for setting up their semiconductor and display manufacturing facility. The project is in the advanced stage of evaluation by the government of India," the official said.

Both the companies would invest Rs 1,54,000 crore to set up the facility in Gujarat, which would create one lakh job opportunities, Gujarat Chief Minister Bhupendra Patel had then said.

Notably, Prime Minister Narendra Modi, while addressing a poll rally in Bhavnagar, had given a clear indication that the mega semiconductor plant would come up at Dholera SIR, nearly 100 km from Ahmedabad.