Taiwan's Foxconn on Monday said that it is pulling out of a joint venture (JV) with Anil Agarwal-led Vedanta Ltd that was set up to produce semiconductors in India, a report by news agency Reuters said. Foxconn and Vedanta signed a pact last year to invest $19.5 billion to set up semiconductor and display production plants in Gujarat, were eyeing to tap into India’s plans to become an electronics major, according to the report.
Foxconn in a statement 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." However, the project was proceeding slowly as talks to rope in European chipmaker STMicroelectronics as a partner got deadlocked, Reuters reported last month.
The Taiwanese firm 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.
Moreover, Vedanta's disclosures last year related to the deal made it seem like it was running the project. It later clarified that Volcan Investments would take the helm. Still, India's market regulator, after an investigation, penalised Vedanta last week, saying it had broken regulations by initially making it appear it had partnered with Foxconn.
Vedanta Group last week had taken full ownership of the JV with Foxconn set up last year to manufacture semiconductors in India.
"The Board of Directors at their meeting held today, July 7, 2023, have considered and approved the acquisition of 100 per cent of Vedanta Foxconn Semiconductors Private Limited (VFSPL) and Vedanta Displays Limited (VDL), wholly owned subsidiaries of Twin Star Technologies Limited (TSTL) via share transfer at face value," Vedanta said in a regulatory filing.