Foxconn & HCL Group collaborate for chip packaging, testing joint venture

Foxconn collaborates with HCL Group to launch a chip packaging and testing venture in India, marking a strategic partnership for advancing semiconductor capabilities in the country.

In a significant move, Foxconn is set to invest $37.2 million, acquiring a 40% stake in a new chip packaging and testing venture, referred to as OSAT in industry terms. This partnership with HCL Group follows Foxconn's termination of a joint venture with India's Vedanta in July.

The substantial investment underscores Foxconn's commitment to bolstering semiconductor capabilities in India, with the aim of contributing to the country's growing tech ecosystem. The joint venture is poised to play a pivotal role in advancing chip packaging and testing capabilities, aligning with Foxconn's strategic initiatives and emphasizing its ongoing global expansion efforts.

Taiwanese manufacturer, Foxconn, has applied to establish a semiconductor fabrication unit in India under the PLI scheme. Minister of IT, Rajeev Chandrashekhar, revealed this development in the parliament in December. This move aligns with Foxconn's strategic efforts to contribute to India's semiconductor ecosystem and benefit from the Production-Linked Incentive scheme.

Presently, Foxconn is primarily involved in the manufacturing of iPhones in India. Embracing a China+1 strategy, akin to numerous tech firms seeking to diversify their supply chains amid escalating US-China tensions, Foxconn has strategically relocated a segment of its operations to India.

This move not only aligns with global geopolitical shifts but also positions Foxconn to navigate uncertainties while contributing to India's growing role in the tech manufacturing landscape. The diversification reflects a broader industry trend as companies strategically reassess and adapt their supply chain dynamics in response to evolving geopolitical and economic considerations.

Collaborating with Tata and Pegatron, Foxconn serves as Apple's contract manufacturing partner in India. Foxconn plays a significant role, contributing to 68% of the overall production of iPhones within the country.

Last November, Foxconn also announced that it would invest another $1.6 billion as part of its China+1 push.

Although the precise details of the investments remain undisclosed, Apple is poised to invest Rs 8,800 crore in Karnataka, focusing on establishing an iPhone component unit. This substantial investment is anticipated to generate 14,000 new job opportunities.

Furthermore, Apple is exploring additional locations in Tumakuru city, Karnataka, to manufacture various iPhone accessories, underscoring the company's commitment to expanding its presence and contributing to job creation in the region. The move aligns with Apple's strategy to strengthen its manufacturing capabilities in India, a key market for the tech giant.