Taiwan’s Foxconn, the leading global contract electronics manufacturer, intends to pursue incentives within India’s semiconductor manufacturing initiative.
This decision was made following the termination of Foxconn’s $19.5 billion chipmaking partnership with Vedanta, an Indian conglomerate with interests in metals and oil.
Foxconn’s Commitment to India’s Chipmaking Incentives Scheme
Foxconn aims to utilize India’s chipmaking incentives by applying for a separate chip manufacturing unit in the country. The company is actively striving to submit an application for participation in the government’s “Modified Programme for Semiconductors and Display Fab Ecosystem.”
This program provides attractive financial incentives, covering up to 50% of the capital costs, for projects related to semiconductor and display manufacturing.
In a statement, Foxconn expressed its commitment to India and its belief in the successful establishment of a robust semiconductor manufacturing ecosystem in the country.
The chipmaking industry is a top priority for India’s economic development and plays a crucial role in the country’s pursuit of a “new era” in electronics manufacturing. Although the breakup with Vedanta is a setback, Foxconn remains determined to contribute to India’s semiconductor ambitions.
The company is currently in discussions with various local and international partners, including those involved in mature chip manufacturing technology for products such as electric vehicles (EVs).
Challenges in India’s Semiconductor Plans
India’s semiconductor market is expected to reach $63 billion by 2026, but the implementation of Prime Minister Modi’s chipmaking plan has faced challenges. Despite previous applications from three companies, including the Vedanta-Foxconn JV, no plans have been finalized.
The stalled projects by ISMC and IGSS Ventures, due to factors such as an acquisition and resubmission, have contributed to the delay. Foxconn cited the slow progress and challenging gaps as reasons for ending the JV with Vedanta.
The involvement of European chipmaker STMicroelectronics and delayed incentive approvals were among the factors that led to the deadlock. Concerns about Vedanta’s finances also played a role in Foxconn’s decision, with both Indian authorities and Foxconn expressing worry in this regard.
No Impact on India’s Semiconductor Plans
The Indian government reassured that the breakup of the JV between Foxconn and Vedanta would not affect the country’s semiconductor plans. Both companies are considered valued investors in India, and the government remains committed to fostering a favorable environment for semiconductor manufacturing.
Ashwini Vaishnaw, the Minister for Railways and Communications, tweeted about the development, saying
Foxconn and Vedanta remain dedicated to India’s semiconductor mission and the Make in India initiative.