In a significant move towards bolstering semiconductor manufacturing in India, Foxconn, the major supplier for Apple, is partnering with the HCL Group to create a joint venture (JV) focused on building a semiconductor assembly and testing facility. The collaboration marks Foxconn’s second attempt to enter the chip-making space in India, following a non-binding memorandum of understanding filed with the Taiwanese stock exchange.
Foxconn Hon Hai Technology India Mega Development, a unit of the Taiwanese contract manufacturer, will inject $37.2 million into the venture, securing a 40% stake in the JV. The proposed outsourced assembly and testing (OSAT) unit in India will be responsible for packaging, assembling, and testing foundry-made silicon wafers, transforming them into finished semiconductor chips.
The anticipated investment for this venture is expected to range between $100 million and $150 million, signaling a substantial commitment to the burgeoning semiconductor ecosystem in India. While the current agreement is in the form of a non-binding memorandum of understanding, it underscores the shared vision of Foxconn and HCL to contribute to India’s semiconductor manufacturing capabilities.
This announcement follows Foxconn’s withdrawal from a $19.5 billion joint venture with Vedanta in July last year, which was aimed at semiconductor manufacturing in Gujarat. Notably, Foxconn is also reportedly collaborating with STMicroelectronics to establish another semiconductor plant in India.
The timing of this partnership aligns with India’s proactive efforts to attract global semiconductor companies, reducing dependency on neighboring China. With the Indian semiconductor industry projected to reach a market value of $55 billion by 2026, various companies, including Micron and Applied Materials, have announced significant investments to set up semiconductor facilities in the country.
The collaboration between Foxconn and HCL signifies a strategic alliance to tap into India’s growing demand for semiconductors, driven by the increasing usage in smartphones, wearables, automotive parts, computers, and data storage.
