Vedanta-Foxconn deal: A timeline of events until the fall out

Vedanta-Foxconn partnership which had laid out plans to invest Rs 1.54 lakh crore with a clear vision of Prime Minister Narendra Modi's of creating a robust manufacturing electronic base in India came to a halt today as Taiwan's Foxconn withdrew from the joint venture with Indian metals-to-oil conglomerate Vedanta for chipmaking plans for India.

"Foxconn has determined it will not move forward on the joint venture with Vedanta. Foxconn is working to remove the Foxconn name from what now is a fully-owned entity of Vedanta," it said in a statement.

News agency Reuters had earlier reported that PM Modi's plan was in trouble, with the Vedanta-Foxconn project proceeding slowly as their talks to involve European chipmaker STMicroelectronics as a partner were deadlocked.

Vedanta-Foxconn had got STMicro on board for licensing technology, but India's government had made it clear that it wanted the European company to have more "skin in the game", such as a stake in the partnership.

Significance of the partnership

The facility aimed at making India the leader in electronics system design and manufacturing (ESDM). This was also done in line with the Gujarat Semiconductor Policy 2022-27 for providing incentives to companies involved in semiconductor manufacturing.

Semiconductor, which is a critical component of electronics devices accounts for key prominence in the electronic sector. The collaboration could have also reduced the dominance of Taiwan which accounts for more than 90 per cent of market share.

The deal could have been a significant boost to car manufacturers who had faced a chip crisis in India. In the last budget, the government allocated around Rs 16,539 crore to the Ministry of Electronics and IT out of which Rs 3,000 was allocated exclusively for Semiconductor Mission in India. However, vedanta group made an additional statement saying that the Foxconn fall out will not impact their plans of chip manufacturing and they have 'other partners.'

As per joint research by the India Electronics & Semiconductor Association (IESA) and Counterpoint Research, India’s semiconductor component market is expected to rise manifold to touch a total revenue worth $300 billion during 2021-2026. The deal was aimed at providing over 1 lakh direct skilled jobs to the people.

Here is the timeline of events and the deal that took place between the contract manufacturer Foxconn and Vedanta limited

5 September 2022.

Prime Minister Narendra Modi met Vedanta chairman on the possibility of creating Silicon Valley in India. Foxconn was proposed to act as the technical partner and Vedanta was the financing partner to diversify manufacturing.

13 September 2022

Vedanta Ltd and Foxconn plan to invest approximately 1.54 lakh crore for a semiconductor project in Gujarat. An MoU was signed in the presence of Ashwini Vaishnaw, Minister of Railways, Communication, Electronics and IT at Gandhinagar in Gujarat. 

“History gets made! Happy to announce that the new Vedanta-Foxconn semiconductor plant will be set up in #Gujarat. Vedanta’s landmark investment of ₹1.54 lakh crores will help make India's Atmanirbhar Silicon Valley a reality," Anil Agarwal tweeted last year.

January 2023

Rumours emerge that the joint venture faces difficulty to get the funding, the company however clarifies it and comments that the deal negotiations were ongoing and financial investors were on board.

February 6, 2023

Vedanta appointed David Reed as CEO of the Semiconductor business amid concerns that Vedanta Foxconn's joint venture struggles to partner for production-grade technology license.

April 13, 2023

Discussions between Vedanta-Foxconn joint venture and STMicroelectronics, a high-tech company creating semiconductor technologies face interruption accounting to factors like tech transfer, partnership time and fund investments.

May 31, 2023

Post nine months to the deal, the project struggles to find a technology partner or license manufacturing-grade technology for the 28nm chips it was seeking to build.

June 6, 2023

Vedanta Group faces high debt risks amid all expansion and acquisition.

June 26, 2023

Foxconn pings other large Indian business houses as Vedanta chip JV stalls

July 7, 2023

Vedanta Ltd plans to take over the semiconductor and display glass businesses held by a unit of its holding company. It also announces that it would take over from its holding company the ownership of a joint venture with Taiwan's Foxconn that was set up to make semiconductors.

July 9, 2023

Foxconn said that it is pulling out of a joint venture with Vedanta Ltd that was set up to make semiconductors from India.

July 10, 2023
Vedanta group says it is not affected by the Foxconn drop out and they have 'other partners' to continue with their plan on manufacturing chips in India.