On Tuesday, shares of Vedanta, the mining conglomerate led by Anil Agarwal, dropped by nearly 3 percent following the withdrawal of Taiwan’s Foxconn from a $19.5 billion semiconductor joint venture (JV). The stock price on the Bombay Stock Exchange (BSE) slipped 2.60 percent to Rs 274.90, while on the National Stock Exchange (NSE), it fell by 2.56 percent to Rs 275.
Foxconn’s Decision Impacts Vedanta’s Semiconductor Project
Foxconn and Vedanta had signed an agreement last year to establish semiconductor and display production plants in Gujarat. However, Foxconn’s withdrawal from the JV was attributed to the venture’s struggle to secure a technology partner for chip manufacturing, which is used in various devices ranging from mobile phones to refrigerators and cars. Despite being known for assembling Apple products, including iPhones, Foxconn faced difficulties in finalizing a deal with European chipmaker STMicroelectronics as the technology partner.
Vedanta Affirms Commitment to Semiconductor Fab Project
While Foxconn disengaged from the JV, Vedanta expressed its unwavering dedication to its semiconductor fabrication (fab) project. The metals-to-oil conglomerate stated that it has lined up alternative partners to establish India’s first foundry, although it did not provide further details about these new partners.
Government Reassures No Impact on India’s Semiconductor Goals
The Union Minister of State for Electronics and IT, Rajeev Chandrasekhar, reassured that Foxconn’s withdrawal from the JV with Vedanta would not affect India’s semiconductor fabrication goals. Despite this setback, Vedanta remains committed to its semiconductor fab project, while Foxconn, being the world’s largest contract electronics manufacturer, continues to play a crucial role in manufacturing Apple iPhones.
The exit of Foxconn from the $19 billion semiconductor joint venture with Vedanta caused a decline in Vedanta’s shares. However, Vedanta remains determined to proceed with its semiconductor fab project, actively seeking new partners to establish India’s first foundry. The government also affirmed that the withdrawal would not impact the country’s semiconductor goals.
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