Foxconn looks to partner with TSMC & TMH for semiconductor fabs in India

Foxconn is seeking new joint venture partners for its semiconductor ambitions in India after its high-profile $19.5 billion project with Vedanta fell apart last week.

The Taiwanese contract manufacturer is now in talks with semiconductor giants TSMC and Japan's TMH for at least two potential JVs to build chip fabrication plants in the country, according to reports.

The move aligns with the Indian government's efforts to build up domestic semiconductor manufacturing and signals Foxconn's continued interest despite exiting the Vedanta partnership.

While the collapse of the Vedanta deal was seen as a blow to Prime Minister Narendra Modi's "Make in India" drive, Foxconn is pushing ahead with plans for 4-5 fabs with its new partners.

The government has also appeared unfazed, likely because Foxconn will bring semiconductor expertise through tie-ups with TSMC - the world's largest contract chipmaker - and TMH. Vedanta is reportedly seeking new backers too.

India announced a $10 billion incentive scheme last year to subsidise 50% of capital spending for semiconductor plants. Foxconn could benefit further from state-level subsidies of 15-25%.

With TSMC providing advanced semiconductor technology and Foxconn's operating efficiency, the partners appear well-placed to take advantage of India's financial assistance.

But industry watchers warn establishing high-tech fabs will still be challenging. Foxconn and its new JV partners have yet to finalise details, so the road ahead remains uncertain.

Also Read: Foxconn seeks India's incentive regime despite Vedanta JV dilution