Vedanta-Foxconn semiconductor JV talks with STMicroelectronics hit roadblock

A joint venture of Vedanta and Foxconn in September 2022 signed a MoU with the Gujarat government to invest Rs 1,54,000 crore to set up the semiconductor plant in the state.

The Vedanta-Foxconn semiconductor consortium’s talks with STMicroelectronics for making it as a technology partner got stuck due to reasons such as lack of agreement on details of technology transfer, the duration of their partnership and the funds to be invested, the Economic Times reported on Thursday.

STMicroelectronics wants to limit the scope of the technology transfer as well as have a sunset clause pertaining to the duration of the joint venture, the report said.

Sunset clause is a measure within a statute or a regulation that provides for the law to cease to be effective after a specific date, unless further legislative action is taken to extend it.

Also Read | All you need to know about Vedanta-Foxconn’s semiconductor plans in India

According to the report, that quoted a person familiar with the matter,  STMicroelectronics has some reservations with its investment in the Vedanta-Foxconn combine and they want Vedanta to take the lead and invest more.

Moneycontrol couldn't independently verify the report.

STMicroelectronics wants to exit the joint venture after 5-10 years during which it can complete technology transfer but the Vedanta-Foxconn combine wants the European chipmaker to stay on for longer, the report further said.

According to another ET report, in February 2023, Foxconn-Vedanta consortium was close to making the European chipmaker STMicroelectronics as the technology partner in their proposed semiconductor chip manufacturing unit in India.

A joint venture of Vedanta and Foxconn in September 2022 signed a Memorandum of Understanding (MoU) with the Gujarat government to invest Rs 1,54,000 crore to set up the semiconductor plant in the state. This will be the first manufacturing facility for semiconductors in India.

Also Read | Anil Agarwal explains why Gujarat was chosen over Maharashtra for Vedanta-Foxconn plant