Foxconn Bets Big On India & US, Gets Taiwan Govt Nod To Invest $2.2 Bn

Taiwanese electronics major Hon Hai Precision Industry Co, also known as Foxconn, has reportedly secured approval from Taiwan’s ministry of economic affairs to invest more than $2.2 Bn in India and the US. 

A Focus Taiwan report said that a major portion, $1.49 Bn, will be routed through Foxconn’s Singapore-based subsidiary into Yuzhan Technology (India) Private Limited, another Foxconn entity.

The capital will be used to set up a new manufacturing facility in India aimed at launching smartphone components, the report added.

The move comes at a time when Foxconn is planning to double down on iPhone manufacturing in India. Earlier this year it was reported that Foxconn plans to increase its manufacturing of iPhones to 25-30 Mn units in the current calendar year.

Foxconn entered India in 2005 and claims to have invested $10 Bn till last year in the country. Earlier this year, Foxconn infused $1.48 Bn in India by purchasing 9,999 shares in its India entity at INR 10 per share, including a premium component.

To ramp up its production efforts, the company is also expanding its footprint in India by acquiring land to build new facilities and factories. For instance, Foxconn is planning to build a new unit in Tamil Nadu to make iPhone enclosures and has also acquired a 300 acre land near the Bengaluru airport which will have a smartphone production capacity of 20 Mn. The company is investing INR 25,000 Cr for the new facility. 

Beefing up the manufacturing of iPhones and its components in India is part of Foxconn’s strategy to diversify its manufacturing operations amid trade tensions between the US and China. 

In April, US President Donald Trump imposed import tariffs of 145% on China and in return, China had levied an import tariff of 125% on US goods. While in May, both the nations made a truce and lowered their tariffs. The US brought the tariffs down to 30% while China lowered it to 10%. 

Apart from increasing its iPhone manufacturing in India, Foxconn also plans to strengthen its semiconductor efforts in the country. In March, the joint venture (JV) between Foxconn and HCL Group secured land for its semiconductor unit in the Yamuna Expressway Industrial Development Authority (YEIDA) region in Delhi NCR. Foxconn plans to invest INR 424 Cr in its semiconductor JV. 

Besides, the company is also looking to push its battery manufacturing efforts in the country and is in talks with the Tamil Nadu government to set up a 200 acres manufacturing unit in the state.