India approves Apple-supplier Foxconn's $433 million joint venture in bid to boost chip industry
Foxconn, the world's largest contract electronics manufacturer, has received approval from the Indian government to build a semiconductor plant in a joint venture with HCL Group, drawing an investment of 37.06 billion rupees ($433 million).
The plant, which will be built in India's northern state of Uttar Pradesh, will be operational by 2027, Ashwini Vaishnaw, India's information minister, said in a cabinet briefing on Wednesday.
Vaishnaw said the facility will manufacture Foxconn's display driver chips, which are used in mobile phones, laptops, automobiles, PCs, and other consumer electronics.
According to a presentation by the minister, the plant will be designed to produce up to 20,000 wafers and 36 million display driver chips per month. Wafers are thin, circular slices of semiconductor material, usually silicon, which form the base of chips.
The deal comes as Apple suppliers including Foxconn are increasingly turning to India in a shift away from China, amid persistent trade tensions between Beijing and Washington. However, bringing chip production to the country has been a difficult and lengthy process.
Taiwan's Foxconn, officially known as Hon Hai Technology Group, first began producing iPhones in India in 2019 and has ramped up capacity in recent years, especially after experiencing pandemic-related production delays in China in 2022.
In 2023, the company pulled out of a joint venture with Indian metals-to-oil conglomerate Vedanta to set up a semiconductor and display production plant in the country as part of a $19.5 billion deal.
Apple reportedly has been striving to shift most of its iPhone production to India as its manufacturing in China faces threats from U.S. President Donald Trump's tariffs on the country.
India could account for about 15%-20% of total iPhone production by the end of 2025, according to Bernstein analysts. Evercore ISI estimates that 10% to 15% of iPhones are currently assembled in India.
Though most of Apple's most important products, such as smartphones and computers, received exemptions from Trump's "reciprocal tariffs" last month, officials had warned that the exemptions could be temporary.
The U.S. Commerce Department is conducting a national security investigation into imports of semiconductor technology and related downstream products, which could result in new tariffs.
U.S. imports from China during Trump's current term face 30% additional tariffs, while the rate is 10% for most other countries including on India and Vietnam.
Analysts have previously told CNBC, that Trump's tariff policy was expected to accelerate efforts by Apple to shift manufacturing to India.
India has been wooing Foxconn as part of its "Semiconductor Mission" which aims to build a strong chips and display ecosystem in the country. The Foxconn joint venture will be the sixth semiconductor unit to be constructed under the plan.
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