Gujarat negotiating with Foxconn for semiconductor factory

13 Jul 2023 , 09:45 AM

After the termination of a $19.5 billion joint-venture deal between Vedanta and a Taiwanese company, a top government official confirmed that the Gujarat government in India is now in talks with Foxconn to establish a semiconductor plant.

Vijay Nehra, the secretary of Gujarat’s science and technology department, stated that they are in contact with potential investors, including Foxconn, and that Gujarat is well-positioned to attract leading chipmakers.

Foxconn recently abandoned its project with Vedanta in Gujarat, citing issues with poor progress. This dissolution dealt a setback to India’s ambitions of becoming a semiconductor manufacturing hub. Foxconn clarified that it would independently apply for Indian chip incentives and explore new collaborations.

When approached for comment, Foxconn did not respond immediately. Reuters was the first to report on the discussions with Gujarat.

Prime Minister Narendra Modi aims to prioritize chipmaking as part of his vision for a ‘new era’ in electronics manufacturing, but the strategy has faced challenges thus far.

The Vedanta-Foxconn joint venture, along with Singapore’s IGSS Ventures and the international consortium ISMC, which includes Tower Semiconductor as a tech partner, had all applied for incentives last year, but no agreements have been finalized yet.

Foxconn explained the split with Vedanta, stating that both sides recognized the project was not progressing at a satisfactory pace and that there were challenging gaps they couldn’t overcome smoothly.

In a LinkedIn post, a Foxconn salesperson in India mentioned, ‘Sometimes, you will fly higher when in solo.’

Following Micron Technology’s announcement of investing up to $825 million in a semiconductor testing and packaging facility in the state, Gujarat has initiated talks with them as well.

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