Source: Content compiled by Semiconductor Industry Watch (ID: icbank) from livemint, thanks.
Foxconn Technology Group is teaming up with ST in a bid to build a semiconductor plant in India, seeking government support to expand its business in the South Asian country.
Taiwan's Foxconn and France's stmicroelectronics are applying for state support to build 40-nanometer chip factories, according to people familiar with the matter. He asked not to be named because the plan has not been made public. This mature chip is used in cars, cameras, printers and a variety of other machines.
Foxconn's previous attempt to form a partnership with billionaire Anil Agarwal's Vedanta Resources Ltd. failed after a year of little progress. By teaming up with ST, contract manufacturer Foxconn is tapping the expertise of the chip industry pioneer to expand its lucrative but troubled semiconductor business.
The failure of Foxconn's previous attempt with metals firm Vedanta highlights how difficult it is to set up new semiconductor plants, which are massive complexes that cost billions of dollars to build and require very specialized expertise to operate. Neither Foxconn nor Vedanta has extensive previous experience in chip manufacturing, and their joint venture has been hampered by failure to find a partner with production-ready chip technology and by obtaining approval for state subsidies.
New Delhi has asked Foxconn, best known as Apple Inc's main assembly partner, to provide more details about its collaboration with ST, the people said. Foxconn is also in talks with several other companies that own chip manufacturing technology, a person familiar with the matter said.
Like countries such as the United States, India is trying to boost chip production to reduce its dependence on expensive imports as well as on Taiwan and China. Indian Prime Minister Narendra Modi has pledged $10 billion to lure chipmakers and promised that his government would cover half the cost of setting up semiconductor factories. That effort prompted U.S. memory chip company Micron Technology Inc to announce a $2.75 billion assembly and test plant in Modi's home state of Gujarat.
Any chip project, including Foxconn's, must be disclosed in detail, including whether it has firm, binding production agreements with technology partners and financing plans that include equity and debt arrangements. Applicants are also required to disclose the type of semiconductors they will produce and their target customers.
Other chip-related companies making inroads in India include Advanced Micro Devices Inc. And equipment maker Applied Materials Inc., which plans to spend $400 million each to build research and development and engineering centers in Bangalore's Southern Technology hub.
India's science ministry did not respond to a request for comment. Spokesmen for Foxconn and ST declined to comment.