Virendra Pandit
New Delhi: After calling off its ambitious joint venture (JV) with Anil Agarwal’s Vedanta Group, Taiwanese major Foxconn is likely to partner with some other companies to set up microchip manufacturing units in India to avail of the massive incentives provided by the government, the media reported.
For this purpose, Foxconn is discussing partnership deals with Taiwan Semiconductor Manufacturing Company (TSMC) and Japan’s TMH Group for setting up semiconductor fabrication units in India.
Foxconn, which manufactures iPhones for Apple, and TSMC are both based in Taiwan. While TSMC is one of the largest chip foundries in the world, TMH offers semiconductor-related solutions and the operation and maintenance of manufacturing equipment, the reports said.
TSMC, which produces more than 50 percent of the chips manufactured worldwide, reported a 33.5 percent increase in revenue to USD 75.88 billion in 2022 from the previous year. Its chips are used by almost all top semiconductor companies.
The Vedanta-Foxconn consortium was one of the five applicants seeking government incentives under a USD 10-billion package that New Delhi announced in December 2021 to promote domestic semiconductor manufacturing.
The Centre is offering a 50 percent subsidy on capital expenditure to companies that set up chip manufacturing units in the country.
Besides, to attract such projects under the India Semiconductor Mission (ISM), some states are also prepared to provide additional subsidies of 15-25 percent. That means as much as 75 percent of the total project cost would potentially be subsidized.
In a statement, Foxconn said it was discussing with Indian and global companies for a potential partnership and will resubmit its application to the government under the Modified Programme for Semiconductors and Display Fab Ecosystem policy.
“It is challenging to build fabs from scratch in a new geography, but Foxconn is committed to investing in India. We are working on such challenges since the 1980s. We will continue to strongly support the government’s “Make in India” ambitions and establish a diversity of local partnerships that meet the needs of stakeholders.”
Foxconn already has mobile phone assembly units in South India producing millions of iPhones and Xiaomi smartphones. It also manufactures other electronic products, including EVs.
“Foxconn first entered India in 2006. The group looks to grow with India’s nascent semiconductor industry. Foxconn has channels of communication with government stakeholders and we are clear about the continued commitment to India,” the company added.
After its Foxconn plans collapsed, Vedanta is also exploring new avenues.
Taiwan-based Hon Hai Technology Group, also known as Foxconn, had recently pulled out of the JV with Vedanta’s USD 19.5 billion chip project in Gujarat and said it intends to apply separately for incentives under the government’s semiconductor production plan.
After Foxconn’s pullout, Vedanta said it has also lined up partners and will begin a foray into chip-making this year.
Vedanta Semiconductors and Display Global Managing Director Akarsh K Hebbar said his company has a partnership with Innolux for the display fab and is waiting for the government’s nod to its application.
“Substantial progress has happened to tie up technology and equity partners in semiconductors and we will make an announcement soon.”