Foxconn Dumps $19.5 Billion Chip Plan in Blow To India (reuters.com) 33
Taiwan's Foxconn has withdrawn from a $19.5 billion semiconductor joint venture with Indian metals-to-oil conglomerate Vedanta, it said on Monday in a setback to Prime Minister Narendra Modi's chipmaking plans for India. From a report: Foxconn, the world's largest contract electronics maker, and Vedanta signed a pact last year to set up semiconductor and display production plants in Modi's home state of Gujarat. "Foxconn has determined it will not move forward on the joint venture with Vedanta," a Foxconn statement said without elaborating on the reasons.
The company said it had worked with Vedanta for more than a year to bring "a great semiconductor idea to reality", but they had mutually decided to end the joint venture and it will remove its name from an entity that is now fully owned by Vedanta. Modi has made chipmaking a top priority for India's economic strategy in pursuit of a "new era" in electronics manufacturing and Foxconn's move represents a blow to his ambitions of luring foreign investors to make chips locally for the first time.
The company said it had worked with Vedanta for more than a year to bring "a great semiconductor idea to reality", but they had mutually decided to end the joint venture and it will remove its name from an entity that is now fully owned by Vedanta. Modi has made chipmaking a top priority for India's economic strategy in pursuit of a "new era" in electronics manufacturing and Foxconn's move represents a blow to his ambitions of luring foreign investors to make chips locally for the first time.
Shocking! (Score:4, Funny)
Nobody could've expected to get Foxconned!
Re: Shocking! (Score:2)
OMG, I thought those of us on southeast Wisconsin were the only ones promised a shiny new toy by Foxconn only to have them renege on it.
Truly shocking and unthinkable.
Re: (Score:2)
Nobody was sure what would have come out of the partnership between two vaporware companies anyways. So Foxconn chickened out first. That said, among the companies that were lined up for a partnership with Vedanta, Foxconn was the best. We now know what to expect.
Dumb question based on anecdata (Score:5, Interesting)
Does Foxconn ever follow through on sweetheart factory deals? Or do they just have a low cost high revenue division making these deals and backing out? Whose name is the Chinese equivalent to Vaporware.
If so they are smart (Score:4, Informative)
Way more people pay attention when you make such a deal as do when you back out.
Re: (Score:2)
But yea money, greed, and fools and all that.
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Re:If so they are smart (Score:5, Informative)
Re: If so they are smart (Score:1)
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Did it occur to you that the politicians making the deals are as interested in the initial splash as Foxconn is, and as disinterested in the actual outcome as Foxconn appears to be?
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I am not up on the deals that Foxconn has backed out of except the one in Wisconsin. This one appears to be a multi-body problem that couldn't have been solved by Foxconn alone.
What other deals has Foxconn back out of?
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Pennsylvania.
And, technically speaking, I don't think they formally backed out of their deal with either state... they just got the sweetheart tax plus incentives deal and then mostly did nothing.
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They do this all the time (Score:2)
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Maybe the next time someone makes a deal with them
That's how deals work. If you don't like the conditions in your deal, you have only yourself to blame for not negotiating for stronger protections from the start.
But then Foxconn also has a right to not sign up to a deal in the first place if the other party does not sweeten the deal enough for them.
It's down to who has the most bargaining power to get concessions from other parties in the deal. It's like Western commentators have forgotten how business works.
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There are a few third parties to consider in the failure of this deal. From TFA, STMicro was expected to put "more skin in the game". Which, when dealing with India, means "give us more of your stuff". Also, unstated, is the looming threat of Taiwan vs China. The more partnerships Taiwanese businesses have, the more these partners might impose their politics on the country. India is already undependable in their stance on Russia vs Ukraine.
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While I agree Foxcon's track record is poor here, I would say it is far more likely that the risk and economics caused the deal to break down. The project was a long shot from the get-go.
How is this a blow to India? (Score:2)
From the article:
Vedanta said it is fully committed to its semiconductor project and had "lined up other partners to set up Indiaâ(TM)s first foundry". "Vedanta has redoubled its efforts" to fulfil Modi's vision, it added in a statement.
So it's fully funded and will still be built, but with different partners...
Even the summary said that Vedanta now fully owned it.
If the plant goes forward seems likely it will be successful, this is more of a blow to Foxconn!!
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It's a blow to India because, among all the companies that were lined up for a partnership with Vedanta to build this high tech semiconductor fab, Foxconn was the best. And neither vedanta nor foxconn had any clue of building a fab. That's the beauty of this deal.
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Not getting a check for $19.5 billion isn't a blow? Of course they are going to frame it like its just a flesh wound.
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Not getting a check for $19.5 billion isn't a blow?
They said they replaced that with other investors so it seems not.
When you are talking about an entire nation, no 19 billion is not that much.
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For a poor country like India, that's a lot. It's like the US govt. losing out on $190 billion, or worse when you consider the poorer you are the more impact losing money has.
Vedanta or ... Vendata? (Score:2)
does not look promising (Score:4)
So this week Goldman Sachs claimed that by 2050 India would exceed the US as an economy. Presumably they were guessing that once all the H1Bs were dumped by the US they would return home and start building a giant tech economy with sparkly fireworks and golden bricks on the streets and curry for all.
Not gonna happen.
India is a country without enough toilets. The environment is full of e coli. I don't think they're be going to be having any semiconductor cleanrooms and doing DUV unless they find a way to make semiconductors out of cow poop.
I once bought a tiny hard drive made by an Indian startup. It was garbage and it failed quickly. In manufacturing and also product quality, India's not going to outgun even China unless you count turned brass candleholders at TJMax. Sure as hell not in electric cars, routers, generative AI, or drones.
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"India is a country without enough toilets... I don't think they're be going to be having any semiconductor cleanrooms and doing DUV unless they find a way to make semiconductors out of cow poop."
Slashdot commenters keep telling me that California is also occupied by people shitting the the streets, and yet California produces a lot of semiconductors.
Re: Potential Reasons (Score:1)
Pull out (Score:1)