12/07/2023 (Taipei) - Foxconn (trading as Hon Hai Technology Group in China and Taiwan), known for assembling iPhones, has withdrawn from its $19.5 billion semiconductor factory project with Vedanta, a leading Indian firm. The mutual termination of this joint venture, as reported by Reuters, comes without a detailed rationale from Foxconn.
This decision marks a significant blow to Indian Prime Minister Narendra Modi's economic initiatives, especially in his home state of Gujarat, where the factory was planned. However, Foxconn maintains its operations in India, including an iPhone 14 manufacturing unit in Sriperumbudur.
The move coincides with a period when companies like Apple are diversifying their manufacturing operations beyond mainland China amid rising political and economic uncertainties. India, where Apple recently launched its first retail stores in Mumbai and New Delhi, has been a focal point in this diversification strategy.
Foxconn's history includes several unsuccessful deals, such as a $4 billion incentive deal in Wisconsin and a current lawsuit by EV manufacturer Lordstown Motors in the US over alleged "fraud and consistent failure to meet commercial and financial commitments."
Despite the termination of the Foxconn-Vedanta deal, Vedanta asserts its commitment to the semiconductor project, indicating that it has engaged other partners to proceed with the foundry.