Foxconn partners with HCL Group for Chip Venture in India

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Foxconn partners with HCL Group for Chip Venture in India

Foxconn partners with HCL Group for Chip Venture in India

Industry News
Jan 18,24

This venture, referred to in the industry as OSAT (Outsourced Semiconductor Assembly and Test), follows Foxconn's withdrawal from a previous joint venture with India's Vedanta in July.

Foxconn partners with HCL Group for Chip Venture in India

Hon Hai Precision Industry, commonly known as Foxconn, has announced a collaboration with India's HCL Group to initiate a chip packaging and testing venture in the country. As per a regulatory filing to Taiwan's stock exchange, Foxconn Hon Hai Technology India Mega Development, a subsidiary of the Taiwanese contract manufacturer, is set to invest $37.2 million for a 40% stake in this joint venture.

This venture, referred to in the industry as OSAT (Outsourced Semiconductor Assembly and Test), follows Foxconn's withdrawal from a previous joint venture with India's Vedanta in July. The HCL Group had already expressed active discussions with the Karnataka state government for the establishment of an OSAT facility.

Simultaneously, Foxconn has submitted a new application to establish a semiconductor fabrication unit in India under the "modified scheme for setting up semiconductor fabs in India," a government initiative aimed at bolstering the electronics manufacturing sector, including semiconductors. Rajeev Chandrasekhar, the Minister of State for Electronics and IT, shared this information with the Parliament.

The Ministry of Electronics and Information Technology (MeitY) is currently in the process of verifying Foxconn's application for setting up a semiconductor factory in India. A government official, speaking on the condition of anonymity, mentioned that Foxconn needs to demonstrate the required technology for semiconductor manufacturing.

These developments follow Foxconn's exit from a joint venture with the Vedanta Group, which intended to establish a chip plant in Gujarat with an investment of approximately Rs 1.5 lakh crore.

In response to geopolitical tensions and economic uncertainties affecting its primary operations in China, Foxconn, the world's largest assembler of iPhones and other electronics, is expanding its presence in India. The company holds a significant position in India's iPhone manufacturing, with 68% of total production, followed by Pegatron at 18% and Wistron [Tata] at 14%. Notably, Foxconn received approval in December to invest an additional $1 billion in a new plant for manufacturing Apple products in India. This investment is supplementary to the $1.6 billion already allocated for a 300-acre site near Bengaluru's airport. The majority of this cumulative investment is focused on Apple in India, with potential diversification into manufacturing devices and components, such as electric vehicle parts, for other clients. Last year, Apple produced iPhones worth over Rs 1 lakh crore in India, with a substantial portion exported.

Source: Money Control