Foxconn, the Apple supplier drops the $19.5 billion deal with the mining hulk Vedanta in India to develop a chip-making plant in India.
In less than a year since the company made the official announcement to set up a facility in Prime Minister Narendra Modi’s home state Gujarat, Foxconn has officially dropped the plan.
Analysts say this calls for a setback in the nation’s technological and industrial goals.
Although certain ministers claim that this will in no way affect the country’s chip-making goals.
Headquartered in Taiwan, Foxconn said its priorities will now be to
“explore more diverse development opportunities.”
The firm also claimed that the decision was, in fact, “mutual” with Vedanta, which has shouldered the full ownership of the venture, but did not give much details of the reason behind such a withdrawal.
“We will continue to strongly support the government’s ‘Make in India’ ambitions and establish a diversity of local partnerships that meets the needs of stakeholders.”
Foxconn also added.
Vedanta, however, approved that it had
“lined up other partners to set up India’s first chip factory.”
“The surprise pull out of Foxconn is a considerable blow to India’s semiconductor ambitions,”
Paul Triolo from global consulting firm Albright Stonebridge Group added.
“The apparent cause of the pull out is the lack of a clear technology partner and path for the joint venture,”
he also added.
“Neither party had significant experience with developing and managing a large scale semiconductor manufacturing operation.”
Although the Minister of State Electronics and Information Technology, Rajeev Chandrasekhar, took it to Twitter and said that the decision made by Foxconn had
“no impact on India’s semiconductor fabrication goals. None.”
Mr. Chandrasekhar added that both Foxconn and Vedanta were “valued investors” and subsequently “will pursue their strategies in India independently.”
The government of India has also been actively working on strategies to fuel chipmaking
ventures in India.