iPhone manufacturer cancels $19.4 billion India contract

TAIPEI: Due to “challenging gaps,” Taiwanese electronics firm Foxconn withdrew from a $19.4 billion agreement with India’s Vedanta to produce semiconductors in the South Asian country, the company said on Tuesday.

Vedanta and the world’s leading iPhone maker inked a deal in September to set up a semiconductor plant in Gujarat, India, that will also produce display screens for mobile devices.

The objective was to increase New Delhi’s independence in the technical supply chain because semiconductors are a vital part of almost all modern electronics, running everything from coffee machines to electric cars.

Foxconn, however, said on Thursday that “the parties had agreed to split up.”

Hon Hai Technology Group, also known as Foxconn, said that “the project was not progressing quickly enough, there were tough challenges we were not able to easily resolve, as well as external factors unrelated to the project” that both sides acknowledged.

Vedanta, one of the largest mining corporations in India, would have received a 60% ownership in the joint venture under the terms of the agreement, with Foxconn receiving the remaining 20%.

The facilities were also expected to be in use by 2024, according to both businesses’ projections.

The statement said that Foxconn’s exit won’t cause a loss because it “has not invested money or fixed assets into the” joint venture.

Vedanta said it is “fully committed to its semiconductor fab project” and added that there are other partners in line to establish India’s first foundry, despite declining to confirm the withdrawal.