Government Set to Deny Funding for Vedanta-Foxconn Chip Venture: Report

The venture's application seeking billions in government assistance hasn't met the criteria set by the government, the report said.

By Reuters | Updated: 31 May 2023 11:24 IST

Government Set to Deny Funding for Vedanta-Foxconn Chip Venture: Report

Photo Credit: Reuters

Last year, Vedanta and Foxconn announced they would invest $19.5 billion in Gujarat

Highlights

Vedanta struggles to reduce a heavy debt load
The project is still in search of a technology partner
Vedanta and Foxconn are the assembler of a bulk of the world’s iPhones

The Indian government is poised to deny crucial funding for Anil Agarwal's chip venture, Bloomberg News reported on Tuesday, a setback to the billionaire's ambition to build India's 'own Silicon Valley.'

The authorities are likely to inform the venture between Vedanta and Taiwan's Foxconn that it won't get incentives to make 28-nanometer chips, the report said, citing people familiar with the matter.

The venture's application seeking billions in government assistance hasn't met the criteria set by the government, the report said. The project is still in search of a technology partner and a manufacturing-grade technology license for the construction of 28nm chips, it added.

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India's technology ministry, Vedanta and Foxconn did not immediately respond to Reuters requests for comment.

The setback comes at a time when Agarwal's metals and mining conglomerate is already grappling with reducing its significant debt load.

Last year in September, Vedanta and Foxconn – formally called Hon Hai Precision Industry – announced they would invest $19.5 billion (roughly Rs. 1.6 lakh crore) to set up semiconductor and display production plants in the state of Gujarat, creating more than 100,000 jobs.

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"India's own Silicon Valley is a step closer now," Agarwal had said last year after the announcement.

Back in May last year, Agarwal had said Vedanta would finalise a location for its semiconductor and display plants in India by mid-June and will have the first chip product ready in two years. "You have to create another Taiwan in India," Agarwal said at the time, noting that India would have to focus on bringing the entire semiconductor ecosystem locally for it to be a global powerhouse.

In February 2022, Foxconn had announced that it would make semiconductors in India in partnership with Vedanta. In a statement, Foxconn had said it had signed a memorandum of understanding with oil-to-metals group Vedanta to make semiconductors, calling it "a significant boost to domestic manufacturing of electronics in India."

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