New Delhi: Foxconn Technology Group is partnering with STMicroelectronics for a bid to build a semiconductor factory in India. Taiwan’s Foxconn and Franco-Italian STMicro are applying for government support for a 40-nanometer chip plant.
The move comes after Foxconn’s attempted partnership with Vedanta Resources lapart after a year of little progress. By partnering with STMicro, contract manufacturer Foxconn is tapping the expertise of a chip-industry pioneer to expand in the semiconductor business.
The failure of Foxconn’s previous attempt with Vedanta shows how difficult it is to set up new semiconductor plants. These need massive infrastructure that cost billions of dollars to build and require very specialized expertise to run. Neither Foxconn or Vedanta had previous significant experience in chipmaking and their JV was thwarted by delays in finding a right partner who would have had production-ready chip technology. Even obtaining approvals for government subsidies was time consuming.
India is trying to boost chip output to reduce reliance on expensive imports and dependence on Taiwan and China. Prime Minister Narendra Modi has pledged $10 billion to woo chipmakers, promising that the government will bear half the cost of setting up semiconductor sites. That effort has prompted US memory chip firm Micron Technology to announce a $2.75 billion assembly and testing facility in Gujarat.
Any chip project, including Foxconn’s, will have to make detailed disclosures including whether it has firm, binding agreements with a technology partner for production, as well as financing plans comprising equity and debt arrangements. The applicants also need to disclose the type of semiconductors they will make and their target customers.
Other chip-related firms moving into India include AMD and equipment maker Applied Materials I which plan to spend $400 million each on R&D and engineering centers in Bengaluru.
Also Read More –