Vedanta share price drops almost 3%; here's why Foxconn decided to exit the semiconductor JV
Vedanta declined almost three per cent in morning trade on BSE on Tuesday, a day after Taiwan-based firm Foxconn said it had decided to pull out of a $19.5 billion semiconductor joint venture (JV) with Vedanta. The stock opened at ₹275 against the previous close of ₹282.25 and fell 2.6 per cent to ₹274.90 soon.
The stock traded 1.26 per cent lower at ₹278.70 around 10:15 am. Taiwan-based Hon Hai Technology Group, which is popularly known as Foxconn, and India's metals and mining conglomerate Vedanta announced a joint venture in 2022 to manufacture semiconductors in India's Gujarat.
Vedanta was to hold the majority stake in the JV, according to the MOU signed between the two companies. On July 10, 2023, Foxconn said in a statement that in order to explore more diverse development opportunities it had decided not to move forward on the joint venture with Vedanta.
"Foxconn is working to remove the Foxconn name from what now is a fully-owned entity of Vedanta," Foxconn said. As per a Reuters report, quoting sources, "Concerns about incentive approval delays by India's government had contributed to Foxconn's decision to pull out of the venture.
New Delhi had also raised several questions on the cost estimates provided to request incentives from the government." Meanwhile, Minister for Railways, Communications, Electronics & Information Technology, Ashwini Vaishnaw wrote on Twitter that “Both the companies Foxconn and Vedanta are committed to India’s semiconductor mission and Make in India program." After Foxconn's withdrawal from the JV, Vedanta said it has lined up other potential partners to set up India's first foundry. Earlier the Anil Agarwal-led Vedanta Group said that it will acquire a 100 per cent stake in
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