Foxconn, the major Apple iPhone supplier, has decided to pull out of a $19.5 billion investment project with Indian oil giant Vedanta. The project, which aimed to build a chip factory in India, had been announced less than a year ago. This withdrawal is seen as a setback for India’s technology industry.
According to Foxconn, the decision to divest was made by mutual agreement with Vedanta. This means that Vedanta now fully owns the joint venture. Foxconn stated that the project was not progressing quickly enough due to challenging gaps and external issues unrelated to the project.
However, an Indian government minister assured that this withdrawal would not impact the country’s plan to boost chip manufacturing. Hon Hai, the parent company of Foxconn, emphasized that they would continue to support India’s “Made in India” ambition.
Paul Triolo, an analyst from Albright Stonebridge Group, stated that Foxconn’s exit is a significant blow to semiconductor development in India. The lack of a clear trajectory for technology partners and joint ventures, along with the inexperience in managing large-scale manufacturing operations, were cited as reasons for the withdrawal.
Despite this setback, India has been actively working to support its chip manufacturing industry. Last year, the country established a $10 billion fund to attract more investors in this field, aiming to reduce its dependence on foreign chipmakers. Several other companies have also announced plans to set up semiconductor factories in India in recent years.
India’s ambition to become a leader in the global semiconductor supply chain faces challenges, such as time-consuming development, high costs, and energy consumption. Infrastructure development, reliable power supply, and efficient customs clearance are among the hurdles that need to be overcome.
Analysts and experts point out that India still lacks the necessary resources and policies to compete in the global semiconductor industry. Water, energy, and talent in component physics and process technology knowledge are areas that require attention and improvement.
India’s ambitious plans to become a global semiconductor powerhouse are still a work in progress. Despite the setbacks, the government remains committed to attracting investments and developing the necessary infrastructure to support chip manufacturing in the country.