Foxconn in talks for 2 fab plants as Vedanta joint venture fails
One of the facilities the Taiwanese company plans will be a gallium nitride-based semiconductor plant to make chips widely used in power electronics, electric vehicles (two-wheelers) and communications devices. One of the people involved in the talks said other fabs will rely on silicon.
It is known that Foxconn is looking to make a range of chips – 14, 28 and 40 nm. While the details are not finalized, Foxconn could also bring in the Taiwanese fab as a technology partner or JV partner.
Meanwhile, in an unusual move, Foxconn issued a statement on Tuesday, trying to explain why it was withdrawing from Vedanta JV and its next move. Foxconn’s statement, which alluded to the snags without elaborating, said: “The two parties mutually agreed to ways of parting. This is not negative.
There was recognition on both sides that the project was not going fast enough, there were difficult gaps that we could not bridge smoothly, as well as external problems not related to the project.”
Foxconn on Monday pulled out of its joint venture with Vedanta to set up a $19.5 billion fab plant to manufacture 28nm and 40nm chips in Dholera, Gujarat, in a blow to the government’s semiconductor ambitions in an evolving geopolitical backdrop.
“When Foxconn is course corrected, it is only after significant considerations about the near-term impact on our shareholders, and on the company’s long-term health for the group and our shareholders,” the Taiwanese company said a day after announcing its exit. from JV. She added that building prefabricated buildings from scratch in a new geographic area is a challenge, noting that Foxconn is committed to investing in India. “Foxconn has no intention of doing anything other than continuing to strongly support the government’s ‘Make In India’ ambitions and creating a variety of local partnerships that cater to stakeholder needs,” the company said.
In the new scheme of things, Foxconn is also considering buying back the chips that it makes in India, you know. Globally, the company is estimated to purchase more than $40 billion in chips annually for electronics manufacturing (EMS) requirements. The demand for chips will only rise as Foxconn plans a major foray into the world of electric vehicles. Among the countries that want to set up an electric vehicle factory is India.
Gallium-based Fabs require a much lower investment of $80-100m to $500m depending on factory specifications and can be built commercially faster. Some Indian companies are also looking to enter into this field with a very wide market.
Foxconn Hon Hai Technology Group in its statement confirmed the move to set up a fab factory. “Foxconn is working on an application related to the Modified Semiconductor Program and the Exquisite Ecosystem Showcase.”
The company said it is already reviewing the landscape for optimal partners. Welcoming a variety of stakeholders, both in India and abroad, the company noted that its potential partners must want to see India taken to the next level and that they must complement Foxconn’s world-class supply chain management and manufacturing competence.
The Taiwanese giant will bid to qualify through the government’s semiconductor scheme, which offers an incentive of 50 percent on project cost. The program was recently opened to new players and the deadline has been extended to December next year.
Earlier, only three players applied to set up a fab plant – Vedanta-Foxconn, Singapore-based IGSS, and ISMC which has a partnership with technology firm Tower Corporation.