Back in February last year, it became known about the intentions of the Indian conglomerate Vedanta, with the support of the Taiwanese Foxconn, to launch the production of semiconductor components in India. As it turns out, Vedanta, which claimed to cover half of the $19 billion in project costs through government subsidies, may end up not getting the necessary funds from the country’s budget.
Image Source: Halden Krog, Bloomberg
At least this is reported by Bloomberg, citing sources familiar with the situation. The Indian authorities are not ready to support the project, since Vedanta has not been able to find a technology partner that would enable the production of 28nm chips in India, either directly through its participation or through a technology licensing scheme. Foxconn has not yet been seen in lithographic activity, so its participation in this project could not initially ensure compliance with the requirements of the authorities for the project.
Representatives of Vedanta could only explain that the company is still waiting for the decision of the Indian authorities on subsidizing the proposed project. The authorities of the country initially tried to attract chip manufacturers to their territory, offering them subsidies of up to $10 billion for the project, or up to half of all costs with smaller amounts, but apart from Vedanta and Foxconn, no one openly showed up by the appointed date, and therefore it was decided to extend the competition for perpetual basis, but from a later date.
According to sources, under the current conditions, the Indian authorities will most likely require Vedanta and Foxconn to refocus on the production of 40-nm chips, provide all necessary guarantees and adjust the project budget downwards. Vedanta, which has $6.8 billion in debt, is interested in receiving subsidies for such projects. As expected, the European STMicroelectronics could become a manufacturing partner of the Indian conglomerate.
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