The presence of STMicroelectronics as a technical partner in the Vedanta-Foxconn chipmaking project is critical since it will help the consortium qualify for the Centre’s Rs 76,000 crore incentive program.
The discussions between the Vedanta-Foxconn semiconductor consortium and STMicroelectronics on its entry into the deal as a technology partner have stalled due to issues such as technology transfer, partnership duration, and the funds to be invested by each company, according to The Economic Times on Thursday.
According to a source quoted in the paper, one of the main problems is that STMicroelectronics wants to limit the breadth of the knowledge transfer and also has a sunset clause governing the term of the joint venture.
“STMicroelectronics has some reservations about investing in the (Vedanta-Foxconn) combination.” “They want Vedanta to take the initiative and invest more,” the source said.
A sunset clause, also known as a sunset provision, is a provision in a rule or a contract that will automatically expire on a certain date. A nice example of a sunset clause is when the sunset clause date is reached, the sunset clause provides an automatic appeal of the entire statute.
According to the article, STMicroelectronics intends to quit the joint venture after 5 to 10 years. It can complete technology transfer at that time. However, the Vedanta-Foxconn partnership wants the European chipmaker to stay on for a longer period of time.
The presence of STMicroelectronics as a technical partner in the Vedanta-Foxconn chipmaking project is critical since it will help the consortium qualify for the Centre’s Rs 76,000 crore incentive program.
According to Business Today, the India Semiconductor Mission is waiting for the Vedanta-Foxconn JV to bring on a technology partner with a production-grade license before moving on to the next step.
Applicants must demonstrate their experience in the specialized domain of semiconductor production, according to the government’s rule for the semiconductor incentive scheme. To receive government approval for the project, interested businesses must either have a fabrication facility capable of creating semiconductor chips in the 65-28 nanometer (nm) range or have “production-grade licensed technologies” capable of generating 28 nm chips.
In addition, as indicated in the official standards, they must offer evidence of their skills in advanced node technologies through licensing or development.
Vedanta and Foxconn announced plans to build a semiconductor manufacturing facility in Gujarat. The Vedanta Foxconn joint venture had signed an agreement with the Gujarat government to invest Rs 1,54,000 crore in the establishment of semiconductor manufacturing and had chosen the Dholera Special Investment Region near Ahmedabad as the location for the project.
During the March India Today Conclave, billionaire Anil Agarwal stated his desire to make India a semiconductor hub, promising to develop cheaper, higher-quality, and more inventive semiconductors and displays in the next two and a half years.
Agarwal stated that his company has inked memorandums of understanding (MoUs) with 100 Japanese companies, which will assist him in realizing his objective. He also anticipates 700-800 enterprises partnering with Vedanta Company.
According to Agarwal, this cluster of over 100 enterprises will aid in the production of low-cost, high-quality raw materials (semiconductors and displays) that may be employed in the production of electronics in India, which is now unprofitable.
