Foxconn vows to support ‘Make In India’ as JV with Vedanta collapses

The Taiwanese contract manufacturing giant Foxconn on Tuesday came out with a detailed response on why it parted ways with mining giant Vedanta after forming a semiconductor JV last year and also revealed its future plans when it comes to India. As Foxconn-Vedanta JV falls through, the company says it is now working toward submitting an application related to the government’s “Modified Programme for Semiconductors and Display Fab Ecosystem.”

"We have been actively reviewing the landscape for optimal partners. We welcome a diverse set of stakeholders, both inside India and abroad, who also want to see India get to the next level and can complement Foxconn’s world-class supply chain management and manufacturing efficiency," the company adds.

On why Foxconn and Vedanta parted ways, the Taiwanese company says both parties mutually agreed to part ways, and that it is not a "negative".

"There was recognition from both sides that the project was not moving fast enough, there were challenging gaps we were not able to smoothly overcome, as well as external issues unrelated to the project."

Reacting to media reports portraying Foxconn’s withdrawal from the JV a "negative example of the Group’s investment integrity", Foxconn says that is not the case. "When Foxconn course corrects, it is done only after heavy considerations on the near-term impact to our stakeholders, and on the long-term corporate health to the Group and our shareholders."

The company says building fabs from scratch in a new geography is a challenge, but Foxconn is committed to investing in India. "We have been working on challenges like this since the 1980s. Foxconn has no intention to do anything but continue to strongly support the government’s “Make In India” ambitions and establish a diversity of local partnerships that meet the needs of stakeholders," the company adds.

It says there is a lot of interest in Foxconn’s plans and India’s information ecosystem is porous. "However, due to the competitive and sensitive issues involved in negotiating large-scale investments, Foxconn is unable to disclose more information at this time."

The company also clarified that Foxconn has not written down losses related to the joint venture with Vedanta. "Foxconn has not injected capital or fixed assets into the JV."

Vedanta, meanwhile, has also said that it is “fully committed” to its semiconductor fab project and has lined up other partners to set up India’s first foundry. “We will continue to grow our Semiconductor team, and we have the license for production-grade technology for 40 nm from a prominent Integrated Device Manufacturer (IDM),” says a company spokesperson.

He adds the company will shortly acquire a license for production-grade 28 nm as well. “Vedanta has redoubled its efforts to fulfill the Prime Minister's vision for semiconductors and India remains pivotal in repositioning global semiconductor supply chains.”

The Vedanta stock closed 1.59% down at Rs 277.75 on the NSE today.