Foxconn, Vedanta plan tech tie-up with STM for semiconductor manufacturing unit in India

walterbibikow · Feb 4, 2023

Foxconn and Vedanta are close to inducting European chipmaker STMicroelectronics as the technology partner in their proposed semiconductor chip manufacturing unit in India, people aware of the development said.

Foxconn will be the lead partner in the joint venture (JV) that was announced last February. "The government is bullish on Foxconn, which is committing huge investments in India," said a person cited above.

The Vedanta-Foxconn consortium is one of the five applicants seeking government incentives under a $10-billion package announced in December 2021 to promote domestic semiconductor manufacturing.

Partnering with a licence grade semiconductor technology maker with necessary experience in chip manufacturing is one of the prerequisites for project approval and grant of incentives. The government is committed to footing 50% of the project cost, along with other incentives.

Final project approvals are likely to come in by mid-March, sources said.

Lead partner
So far, in addition to the Foxconn-Vedanta proposal, the Centre has received five bids to set up semiconductor fabrication units. These include Next Orbit Ventures, which has partnered with Israel's Tower Semiconductor (Tower has been acquired by Intel but the merger is awaiting regulatory approvals), as well as Singapore-based IGSS Ventures.

Rajesh Exports and Vedanta-Foxconn are proposing to set up display fabs.

Responding to recent speculation about Vedanta's continued involvement in the proposed project, a person who is aware of the government's thinking on the matter told ET that the mine-to-metal conglomerate "will remain a partner, but will not be the lead partner," as it has no prior experience in chip manufacturing.

"The government is okay with Vedanta being a junior partner, but not an operating partner, in the venture," the person said. "If the Foxconn-Vedanta partnership doesn't work out, Foxconn can do it on their own (chip manufacturing in India)."

Foxconn, which is one the largest electronics manufacturing companies in the world, is very "committed to India" and will invest close to $70-80 billion towards chip manufacturing, the person said.

A Vedanta spokesperson told ET that Foxconn and Vedanta have signed a definitive agreement and are fully committed to delivering the project as partners. "The government is keen that the project goes ahead with the best technology partners. And we are aligned with the government on this," a representative for Vedanta said in response to email queries from ET.