Foxconn starts looking for new partner with Vedanta JV facing issues

Taiwan-based contract manufacturing company Foxconn is reaching out to some major Indian business groups in India as it is looking for a new partner for its semiconductors business in the country. The development comes when the year-old joint-venture (JV) between Foxconn and billionaire Anil Agarwal-led Vedanta Group to build a semiconductor fabrication plant in Gujarat has been facing several hurdles.
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Vedanta owns 67 per cent of the JV formed in September 2022. The Centre government is concerned about Vedanta Group’s financial stability and has suggested Foxconn onboard a new partner.

“There are differences between the two partners. We have been in touch with both, but we have suggested Foxconn take on board a different partner,” a senior government official said.

Reportedly, Foxconn and Vedanta have disagreements over the changes to be made in their application to reapply for incentives under the India Semiconductor Mission (ISM).

After this, Foxconn contacted a few companies seeking a potential partnership including two large domestic corporate groups.

Vedanta Resources, the parent company of Vedanta Limited recently raised $450 million from two of its key competitors, Trafigura ($200 million) and Glencore ($250 million), to repay its debt via pledging of equity.

According to analysts, this highlights the dire financial situation of the company’s promoters and their inability to get more traditional sources of funding such as banks and private credit among others.

The JV applied for invectives under ISM in early 2022 but has not received approval from the Centre. On May 31, the centre opened another round of applications.

The government had asked Foxconn to take the lead in the joint venture and to onboard a technology partner with licence-grade semiconductor technology. Outlook India