Foxconn, the world’s biggest electronics manufacturer, has received approval from the Indian government to set up a semiconductor factory in partnership with HCL Group. The project will involve an investment of 37.06 billion rupees (about $433 million).
India’s Information Minister, Ashwini Vaishnaw, said on Wednesday that the plant will be built in the northern state of Uttar Pradesh and is expected to start operating by 2027.
The deal comes at a time when Apple suppliers like Foxconn are focusing more on India and moving some operations out of China because of ongoing trade tensions between China and the U.S.
Vaishnaw said the new factory will make display driver chips for Foxconn. These chips are used in mobile phones, laptops, cars, computers, and other electronic devices.
The minister explained that the plant will be able to produce up to 20,000 wafers and 36 million display driver chips every month. Wafers are thin, round slices of material (usually silicon) that are used to make chips.
Apple is reportedly working to move most of its iPhone production to India because its factories in China are at risk due to tariffs placed by U.S. President Donald Trump.
According to analysts at Bernstein, India could produce about 15% to 20% of all iPhones by the end of 2025. Right now, Evercore ISI estimates that around 10% to 15% of iPhones are made in India.
Most of Apple’s main products, like iPhones and computers were recently given exemptions from Trump’s new tariffs. However, officials have warned that these exemptions might not last forever.
The U.S. Commerce Department is looking into whether importing semiconductor technology and related products could affect national security. This investigation could lead to new tariffs being introduced.
During Trump’s current term, goods imported from China into the U.S. face an extra 30% tariff. For most other countries, like India and Vietnam, the added tariff is around 10%.
Taiwan’s Foxconn, also called Hon Hai Technology Group, started making iPhones in India in 2019. In recent years, it has increased production, especially after facing delays in China due to the pandemic in 2022.
India has been trying to attract Foxconn as part of its “Semiconductor Mission,” which aims to create a strong chip and display industry in the country. The Foxconn joint venture will be the sixth semiconductor plant built under this plan.
The Indian government offers financial support of up to 50% of the project cost to approved applicants for setting up semiconductor plants in the country.
Bringing chip production to India has been challenging and slow. In 2023, Foxconn withdrew from a partnership with Vedanta, an Indian metals and oil company, to build a semiconductor and display plant. This was part of a $19.5 billion deal.
Read more- Maybank Predicts Continued Strong Growth for Sea
