Foxconn reaches out other large business houses as Vedanta chip JV halts

26 Jun 2023 , 10:42 AM

Foxconn, a Taiwanese contract manufacturing firm, has begun reaching out to large Indian business houses in an effort to partner with them to advance its semiconductor manufacturing ambitions in the country.

The year-old joint venture (JV) that Foxconn formed with billionaire Anil Agarwal-led Vedanta Group to establish a semiconductor fabrication unit at Dholera in Gujarat may be on the brink of collapse, stated the sources.

‘The two partners have different perspectives. We have spoken with both, but we have advised Foxconn to seek a different partner,’ a senior government official stated addressing the issue.

Vedanta Resources Ltd (VRL), the parent company of Vedanta Limited, recently raised $450 million from two of its main rivals — Trafigura and Glencore — for repayment of its debt by pledging equity. As per analysts, this highlights the promoters’ dire financial situation and inability to access more traditional sources of funding such as banks and private credit, among others.

VRL has received a $200 million loan from commodities trading firm Trafigura Group and a $250 million loan from mining and natural resources firm Glencore International AG.

According to a source familiar with the matter, Foxconn has engaged in preliminary discussions to investigate the possibility of forming a partnership with two prominent domestic corporate groups. However, these discussions are still in the early stages.

The two had applied for government incentives through the $10 billion Indian Semiconductor Mission in early 2022, but the government has yet to approve their application and opened a new round earlier this month.

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