Vedanta-Foxconn Deal Expected to be First to Receive Govt Approval

The Vedanta-Foxconn $20 billion bid for setting up a fab unit in Gujarat is expected to be the first to get the government nod, ahead of International Semiconductor Consortium (ISMC) and Singapore’s IGSS Ventures. The JV’s proposal included manufacturing 12-inch (300mm) wafers carrying the 28nm chips.

The three proposals were submitted under India’s $10 billion incentive scheme, which gave eligible applicants 50% of the financial support of the project cost on a pari-passu basis. An official familiar with the development told LiveMint that the advisory committee is reviewing the proposals and the India Semiconductor Mission, adding that IGSS Ventures is “clearly not making the cut” since they’re not responding to the government's queries. 

The official’s statement comes as a surprise especially considering recent reports that Vedanta was struggling to find financial backing to fund the projects. Agarwal’s representatives met with large financiers from the Middle East, Singapore, and the US over the last three months to secure funding commitments for the project. 

Further, questions were raised on Foxconn’s credibility to be a technical knowledge partner to Vedanta since the Taiwanese contract manufacturer has no experience running a 28nm fabrication plant. 

The Ministry for Electronics & Information Technology (MeitY) reportedly asked Vedanta and Foxconn to provide details on how they plan to get the required expertise to run a plant at the scale the government envisions or if they will be looking to get a third partner with technical capability.  

It is not yet known when the proposals’ evaluation will be public. However, at the recent Bengaluru Tech Summit, Karnataka’s IT minister CN Ashwath Narayan said, “By February 2023, which company and state will host the semiconductor fabrication unit, will be known.”