Foxconn Technology Group is teaming up with STMicroelectronics NV to jointly participate in a tender for the construction of a semiconductor plant in India.
The Taiwanese manufacturer and the Franco-Italian company intend, in case of a successful result of the tender for them, to receive state support to expand the scale of their presence in the said country.
Foxconn and STMicro are applying for government funding for a 40-nanometer chip manufacturing plant. The relevant information was reported by the media with reference to insiders who wished to remain anonymous due to the fact that the joint action plan of the firms is not public.
The chips, which will be produced at the new plant, are used in cars, printers, cameras, and many other devices.
Foxconn demonstrates systematic attempts to take a stable position in the technology sector of India. In the context of these efforts, the Taiwanese manufacturer managed to get a negative experience. Foxconn failed to establish full-fledged cooperation with the billionaire Anil Agarwal’s Vedanta Resources metallurgical company after a year of progress, which can be called conditional and formal since the effectiveness was minimal and did not guarantee prospects for successful cooperation in the future.
In the framework of joint activities with STMicro, the Taiwanese manufacturer uses the experience of the so-called pioneer of the microcircuit industry to expand the semiconductor business, which is characterized by a high level of profitability, but at the same time is very difficult from a technical point of view.
The failure of Foxconn following the results of attempts to interact with Vedanta, according to experts, is a clear example of how difficult it is to create semiconductor plants, which are massive complexes that require multibillion-dollar investments in construction and special knowledge for management. Neither the Taiwanese manufacturer nor its failed Indian partner had such an experience before. Their joint venture was not launched partly because of the delay in finding a company with ready-made chip manufacturing technology and obtaining permits for government subsidies.
Insiders reported that New Delhi has reached out to Foxconn for details about the partnership with STMicro. One of the interlocutors of the media also says that the Taiwanese company is currently negotiating with several other firms that have chip manufacturing technology.
The Ministry of Technology of India did not respond to a request from journalists regarding the information provided by insiders. Representatives of Foxconn and STMicro also declined to comment.
Currently, India, like many other countries, including the United States, is making efforts to develop local chip production. This aspiration is, among other things, an attempt to reduce the level of dependence on expensive imports of relevant products from Taiwan and China. Indian Prime Minister Narendra Modi has promised to gain chip manufacturers to the country as part of projects totaling $10 billion. He also said that his administration will take on half of the costs needed to create semiconductor plants.
The intentions of the Indian government are already having some results. For example, the American memory chip manufacturing company Micron Technology announced the construction of a $2.75 billion plant in Narendra Modi’s home state of Gujarat. Also, Advanced Micro Devices, which produces integrated electronics, and equipment manufacturer Applied Materials plans to spend $400 million each on research and engineering centers in the southern technology Center of Bangalore.
Indian government appropriations regulations stipulate that initiators of any chip project must provide detailed information, including whether there are binding agreements with a manufacturing technology partner and financing plans, including equity and debt obligations. Applicants should also be informed about the type of semiconductors they will produce and about the target consumers of these products.
As we have reported earlier, Foxconn Launches iPhone 15 Production in India.
