Primary Apple Supplier, Foxconn And Indian Conglomerate Vedanta Collaborate To Build Chip Factory In India

JAKARTA – The increasing scarcity of chips during the COVID-19 pandemic has made many countries want to achieve independence in chip manufacturing. This is done so that they do not depend on the supply of chips from abroad.

This has also prompted Indian conglomerate Vedanta Ltd to sign an agreement with a Taiwanese company, Foxconn, to manufacture semiconductors in the South Asian country. The announcement of the deal was made on Monday February 14, as the two electronics giants seek to diversify their business amid a global chip shortage.

Foxconn, the electronics and chip maker that has been Apple's main supplier, has expanded into areas including electric vehicles (EVs) and semiconductors in recent years.

In a statement, Foxconn said it had signed a memorandum of understanding with oil-to-metal group Vedanta to make the semiconductor. They called it "a significant increase for domestic electronics manufacturing in India."

Foxconn said it would invest $118.7 million to set up a joint venture with Vedanta, which will be the majority shareholder of the new venture. Foxconn will hold a 40% stake in the venture, while Vedanta will hold the remainder.

"This first joint venture between the two companies will support Indian Prime Minister Narendra Modi's vision to create an ecosystem for semiconductor manufacturing in India," said a source at Foxconn quoted by Reuters.

The Taiwanese company has in recent years made semiconductors its core business and last year formed a partnership with Yageo Corp to make semiconductor chips, following a global chip shortage that has rocked manufacturers of goods from cars to electronics.

Foxconn in recent years has also announced plans to become a major player in the global EV market. They say they are in talks with "related foundries" about a possible collaboration to make chips for EVs.