Taiwanese electronics manufacturer Foxconn is joining forces with Indian technology giant HCL Group to establish a semiconductor assembly and testing facility in the country. This strategic partnership marks a significant step in Foxconn’s ambition to diversify its production beyond China and enhancing India’s position in the global semiconductor industry.
According to a Reuters report, the collaboration will lead to the creation of an Outsourced Semiconductor Assembly and Test (OSAT) unit in India. OSAT facilities are crucial in the semiconductor production chain, where they package, assemble, and test silicon wafers, transforming them into finished semiconductor chips. These chips are integral to a myriad of electronic devices, from smartphones to computers.
Foxconn, also a key supplier for Apple, has committed to investing $37.2 million for a 40% stake in this joint venture. The Economic Times reported, citing IT Ministry officials, that the Taiwanese company raised its proposed investment from $29.4 million following talks with HCL.
Meanwhile, the location and other details of the proposed venture are still under wraps. “Final terms, including transaction amount, asset details and conditions, will depend on further negotiation,” the company said and as reported by ET. “By regulation, formal announcements will be published when a definitive agreement is reached.”
In addition to this venture, Foxconn has reportedly expressed interest in establishing a semiconductor fabrication plant in India. This move comes on the heels of Foxconn’s $1.5 billion India investment announcement in November and its previous partnership with Vedanta, which eventually fell through.
The partnership is in line with the government of India’s aspirational “Make in India” and “Atmanirbhar Bharat” (Self-Reliant India) programs, which are designed to improve the nation’s manufacturing capabilities. The joint venture is highly promising for the developing semiconductor sector in India. Along with fostering technology transfer and producing high-skilled jobs, it also lessens reliance on imports and boosts the nation’s strategic competitiveness in the global electronics market.
