Vedanta, the Indian metals and mining conglomerate, saw its share price drop by almost 3% following the news that Foxconn, the Taiwan-based technology group, would be exiting their semiconductor joint venture (JV). In 2022, Foxconn and Vedanta had announced their partnership to manufacture semiconductors in India’s Gujarat, with Vedanta holding the majority stake in the JV. However, on July 10, 2023, Foxconn released a statement stating that they had decided not to proceed with the joint venture due to a desire to explore other development opportunities.
According to Reuters, concerns about approval delays for incentives by the Indian government were among the factors influencing Foxconn’s decision to withdraw from the venture. The government had also raised questions about the cost estimates provided to request incentives. Despite this setback, both Foxconn and Vedanta have expressed their commitment to India’s semiconductor mission and the Make in India program.
Following Foxconn’s withdrawal, Vedanta announced that it had lined up other potential partners to establish India’s first foundry. The Anil Agarwal-led Vedanta Group had previously announced its intention to acquire a 100% stake in semiconductor and display units from its sister concern, Twin Star Technologies. This move would make Vedanta the first Indian company in the Integrated Semiconductor and Display Fab Business.
Vedanta’s share price has been closely aligned with the benchmark Sensex over the past year, both experiencing gains of approximately 21%. The stock reached its 52-week high of ₹340.75 on January 20, 2023, and its 52-week low of ₹221.55 on July 11, 2022.
In summary, Foxconn’s decision to withdraw from the semiconductor joint venture with Vedanta has resulted in a drop in Vedanta’s share price. However, Vedanta remains committed to India’s semiconductor mission and has already identified alternative partners for the establishment of India’s first foundry. As the situation continues to evolve, investors will be closely monitoring Vedanta’s progress in the semiconductor industry.
