Apple supplier Foxconn has made the decision to withdraw from a $19.5bn deal with Indian mining giant Vedanta to build a chip making plant in India. While some may view this as a setback to the nation's technology industry goals, the government remains optimistic. According to a government minister, this move will have no impact on the country's chip making ambitions.
Foxconn stated that the project was not progressing as quickly as anticipated and cited challenging gaps that were difficult to overcome. They also mentioned external issues unrelated to the project as contributing factors. However, they reassured that they will continue to support the government's 'Make in India' ambitions.
Vedanta, on the other hand, has already lined up other partners to establish India's first chip foundry. While this unexpected withdrawal by Foxconn is seen as a considerable blow to India's semiconductor aspirations, the lack of a clear technology partner and path for the joint venture is believed to be the main cause behind the decision.
Despite this setback, India's Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar, remains positive. He stated that Foxconn's withdrawal will not impact India's semiconductor fabrication goals and expressed gratitude to both Foxconn and Vedanta for their investments in the country.
India has been actively working on strategies to support the chipmaking industry and reduce reliance on foreign chipmakers. Last year, the government created a $10bn fund to attract more investors to the sector. Additionally, several other companies have announced plans to build semiconductor factories in India, including US memory chip giant Micron, which recently committed to investing up to $825m in a new facility in Gujarat. This project is expected to create thousands of jobs in the area.
