iPhone assembler pulls the plug on $19.4bn India deal

TAIPEI: Taiwanese electronics giant Foxconn withdrew from a $19.4 billion deal with India’s Vedanta to make semiconductors in the South Asian nation owing to “challenging gaps”, it announced on Tuesday.

The world’s top iPhone assembler signed an agreement in September with Vedanta to set up a chip factory — which would also produce display screens for phones and tablets — in India’s Gujarat state.

The plan was to boost New Delhi’s self-reliance in the technology supply chain, given that semiconductors are an essential component of nearly all modern electronics — powering everything from coffee machines to electric cars.

But Foxconn on Thursday said “both parties mutually agreed to part ways”.

“There was recognition on both sides that the project was not moving fast enough, there were challenging gaps we were not able to smoothly overcome, as well as external issues unrelated to the project,” Hon Hai Technology Group — Foxconn’s official name — said in a statement.

The deal would have seen Vedanta — one of India’s biggest mining companies — take a 60 per cent share in the joint venture, while Foxconn would have the minority stake.

Both companies had also projected that the facilities would be operational by 2024.

Foxconn will not make a loss because of the withdrawal as it “has not injected capital or fixed assets into the” joint venture, the statement said.

While Vedanta did not confirm the pull-out, it reiterated that it is “fully committed to its semiconductor fab project”, adding that there are other partners in line to set up India’s first foundry.