Foxconn and HCL Group announced a partnership, establishing a semiconductor assembly and testing facility in India. The handshake aims to establish an outsourced assembly and testing (OSAT) unit in the country.
Foxconn – Taiwanese technology giant is known as Apple’s main supplier, assembling about 70% of iPhones and is the world’s largest contract manufacturer. In 2022, Foxconn announced heavy investment in the semiconductor industry with a strategy to focus on specialized semiconductor chip production – not competing on advanced chips. And recently, Foxconn continued to announce a cooperation with HCL to build a semiconductor chip pilot factory in India with an investment of up to 37.2 million USD.
A million-dollar handshake pushes the recovery of the Indian semiconductor chip supply chain
In this partnership, Foxconn and HCL Group set up a semiconductor assembly and testing facility in India, with the Foxconn India unit owning a 40% stake in the joint venture. Through this collaboration, the joint venture entities aim to build an ecosystem and drive supply chain resilience for the Indian semiconductor industry. Also within the framework of cooperation, Foxconn wants to “jointly establish OSAT activities in India” with HCL. An OSAT factory will be established with the functions of packaging, assembling and testing silicon wafers made at the foundry, and then turning them into finished semiconductor chips.
It is further reported that Foxconn increased the proposed investment from 29.4 million USD to 37.2 million USD after negotiations with HCL. “Final terms, including transaction amount, details and asset conditions, will be subject to further negotiation. According to regulations, official announcements will be announced when a final agreement is reached” – Foxconn shared.
HCL, on its part, said: “The strategic partnership between the two parties is an opportunity to bring strategic dependence to the group’s investment portfolio.” However, HCL did not disclose financial details from its side. The companies did not go into any detail about the proposed project’s location.
Foxconn’s other plans in India
Foxconn is headquartered in Taiwan and is working to diversify its manufacturing capacity, aiming to reduce its dependence on China following disruptions caused by the COVID-19 pandemic and geopolitical tensions. The company is looking to set up a semiconductor fabrication plant in India to start local chip production.
Foxconn is also planning to set up a semiconductor fabrication plant in India to produce chips locally, with an additional investment of $1.67 billion. Previously, in August, Foxconn announced an investment of $600 million in two projects in Karnataka.
Although Foxconn is a “follower”, it has made certain steps and achievements to make a name for itself in the global semiconductor industry. This project continues to mark an important step in Foxconn’s development, from a manufacturing services company to a platform solutions company, successfully entering the global semiconductor chip manufacturing industry.