Apple supplier Foxconn and India’s HCL Group will form a joint venture (JV) to set up a semiconductor assembly and testing facility in the country.
As per a filing on the Taiwanese stock exchange, Foxconn Hon Hai Technology India Mega Development, a unit of the Taiwanese contract manufacturer, will invest $37.2 Mn for a 40% stake in the JV.
This is the second attempt by the Taiwanese company to enter the chip-making space in India.
The firms will set up an outsourced assembly and testing (OSAT) unit in India. An OSAT plant packages assembles and tests foundry-made silicon wafers, turning them into finished semiconductor chips.
According to ET, the investment for this venture is expected to be pegged between $100 Mn and $150 Mn.
The deal is currently a non-binding memorandum of understanding, as per the filings.
In July last year, Foxconn decided to withdraw from a $19.5 Bn JV with Indian metals-to-oil conglomerate Vedanta to manufacture semiconductors in India. The agreement between the two companies for semiconductor manufacturing in Gujarat was signed in 2022.
Furthermore, Foxconn is reportedly collaborating with French-Italian semiconductor company STMicroelectronics to establish a semiconductor plant in India.
The development comes at a time when India has been rolling out a red carpet for global semiconductor companies to fuel manufacturing in the country and cut dependence on neighbouring China.
As a result, a slew of companies have made a beeline for the country. In June, following Prime Minister Narendra Modi’s visit to the US, Micron announced a $2.75 Bn commitment to set up a DRAM (dynamic random access memory) and NAND assembly, testing, marketing and packaging (ATMP) facility in India.
Applied Materials also plans to invest $400 Mn over the course of next four years to set up a semiconductor centre for commercialisation and innovation in India.
The Indian semiconductor industry is projected to achieve a market value of $55 Bn by 2026, driven primarily by the demand for semiconductors in smartphones and wearables, automotive parts, and computers and data storage, which together make up over 60% of the market.
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