Contract manufacturing firm Foxconn has started reaching out to some major business houses in India in a bid to find a new partner for its semiconductor business, The Economic Times (ET) reported. This comes when the Taiwanese company’s joint venture (JV) with Anil Agarwal’s Vedanta Group has been facing several hurdles.
In September 2022, the two companies formed a JV, where Vedanta has a 67 per cent stake, to set up a semiconductor fab at Dholera in Gujarat.
A government official cited the ET report as saying that the Centre is concerned about Vedanta Group’s “financial stability” and has suggested that Foxconn onboard a different partner. Foxconn, after this, held informal discussions with a few companies to explore a potential partnership. This includes “two large domestic corporate groups”.
The names of these companies, however, were not mentioned in the report.
Vedanta Resources Ltd recently raised $450 million from two companies, Trafigura ($200 million) and Glencore ($250 million), to repay its debt via pledging of equity. Both of these companies are VRL’s rivals.
The ET report quoted experts as saying that this highlights the dire financial situation of the company.
Foxconn and Vedanta also reportedly have differences over the changes to be made in their applications to reapply for incentives under the India Semiconductor Mission (ISM). The JV applied for incentives under ISM in early 2022, but the Centre has not yet approved it.
The Centre has also opened another round of applications earlier this month.
According to reports, the Centre had asked VedantaFoxconn to onboard a technology partner with licence-grade semiconductor technology. Moreover, it had also asked Foxconn to take the lead in the JV.
First Published: Jun 26 2023 | 9:22 AM IST