Report: Foxconn, TSMC in talks over Indian wafer fab

Partners | July 18, 2023

By Peter Clarke

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Electronic manufacturing services provider Foxconn is in talks with foundry TSMC and Japan’s TMH Inc. about a potential joint venture to build a wafer fab in India, according to the Economic Times.

India has a US$10 billion support fund for the construction of wafer fabs and display factories and Foxconn is eager to break into chip manufacturing.

The talks follow Foxconn pulling out of a joint venture with troubled Indian oil-to-mining conglomerate Vedanta Group (see Foxconn pulls out of Indian wafer fab venture). That venture had reportedly been in talks with STMicroelectronics that failed to produce results. Without a major chip company to provide patent licensing and protection, the Vedanta-Foxconn application was struggling to find support from the Indian government.

It has also been reported that India is keen to attract leaders from the semiconductor sector to kick-start its quest to get into the semiconductor industry (see India lobbies Intel, Globalfoundries, TSMC for fabs and India will pay for 70 percent of Micron’s $2.75 billion packaging plant).

Foxconn has been in talks with TSMC and TMH for some time, the report said. The details of the partnership, encompassing the manufacturing of advanced and legacy node chips, will be finalized soon, it added. The third party to the talks, TMH Inc., is a provider of semiconductor manufacturing equipment and parts and repair services.

Some observers have stated TSMC may be reluctant to sign a deal with Foxconn in India, although if it was only involved as a technology licensor there may be possibilities.

TSMC has already committed to partnering for major wafer fabs at near the leading-edge of technolohgy in the US and Japan and is talks over another wafer fab in Europe. It is also pioneering 2nm and 1nm manufacturing processes in its home country of Taiwan. As a result the company already has ambitious manufacturing plans for the remainder of this decade.

Therefore, TSMC may wish to avoid heavy capital expenditure in India. But the foundry may be willing to license some of its trailing-edge manufacturing processes as an investment-in-kind. But an arm’s-length joint venture that lacks access to TSMC’s deep experience for the creation and staffing of a wafer fab could be a set up for failure.

As such much may depend on the Indian government’s view of the credibility of any application for support and whether a potential customer for the chips must also be attracted to bankroll the partnership.