Government To Deny Funding For Vedanta-Foxconn Chip Venture As per available reports, the government is likely to tell the venture between Agarwal's Vedanta Resources Ltd. and Taiwan's Hon Hai Precision Industry Co. it won't get incentives to make 28-nanometer chips
By Teena Jose •
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India's government is poised to deny crucial funding for billionaire Anil Agarwal's chip venture, a setback for a $19 billion push to make semiconductors in the country, according to a Bloomberg report. Citing people familiar with the matter, the report also said that the government is likely to tell the venture between Agarwal's Vedanta Resources Ltd. and Taiwan's Hon Hai Precision Industry Co. it won't get incentives to make 28-nanometer chips.
The venture has applied for such assistance, potentially worth billions of dollars, but hasn't met the criteria set by the government. While Vedanta and Hon Hai can apply again, a rejection would mean delays for Agarwal's ambition to establish India's first major chipmaking operation, even as his metals and mining conglomerate struggles to reduce a heavy debt load, as per the report.
Nine months after Agarwal announced the chip partnership to build India's 'own Silicon Valley,' the project is yet to find a technology partner or license manufacturing-grade technology for the 28 nm chips it was seeking to build, the people said. At least one of those steps is needed for the venture to get government assistance.
Last month, Vedanta-Foxconn JV shared the information that it has closed on a technology partner. At the time of this proposal, the government of India had announced a financial incentive of INR 76,000 crore for setting up semiconductor and display manufacturing in the country. One of the prerequisites for the project approval and qualifying for the semiconductor incentive was to have a license-grade semiconductor technology manufacturer with sufficient experience in chip manufacturing.
As per a company's spokesperson, it was Foxconn accountable for bringing in technology partners, and the JV will enable more licences as needed, whereas Vedanta was responsible for the factory construction.
Currently, a representative for Vedanta said the company was awaiting the outcome of its application from the government.
