Foxconn has set up a joint venture with Indian IT giant HCL Group to establish its semiconductor packaging and testing operations in India, as the Apple manufacturing partner looks to expand its presence in the South Asian nation to reduce reliance on China.
As a part of the deal, Foxconn Hon Hai Technology India Mega Development, a subsidiary of the Taiwanese company, will invest $37.2 million for a 40% stake, it disclosed in a stock exchange filing.
This will be Foxconn’s first investment toward setting up Outsourced Semiconductor Assembly And Test (OSAT) operations in India. The company has committed to putting billions of dollars into the country to bolster its domestic manufacturing for customers including Apple and Xiaomi.
“Foxconn looks forward to jointly setting up OSAT operations in India with HCL. Through this investment, the partners aim to build an ecosystem and foster supply chain resilience for the domestic industry. Foxconn will deploy its BOL, or build-operate-localize, model to support local communities,” the Taiwanese company said in a statement to TechCrunch.
In November last year, Foxconn announced its plans to invest $1.5 billion in India to fulfil its “operational needs.” The company also partnered with local conglomerate Vedanta to set up a $20 billion semiconductor unit in the Indian state of Gujarat. However, it eventually pulled out of the deal in July while committing to “actively reviewing the landscape for optimal partners.”
The manufacturer also submitted a fresh application to start its semiconductor fabrication unit in the country later in the year, Deputy IT Minister Rajeev Chandrashekhar said in the parliament.
“HCL Group has a strong engineering and manufacturing heritage and this is an opportunity that provides strategic adjacency to the Group portfolio. This is line with Government of India’s vision of ‘Make in India’ and ‘Atmanirbhar Bharat’ also,” an HCL Group spokesperson said.