iPhone Maker Foxconn Boosts India Unit With $500 Mn Infusion

Taiwan-based electronics manufacturer Foxconn has invested $500 Mn in its Indian subsidiary, Foxconn Hon Hai Technology India Mega Development.

iPhone maker’s Singapore arm picked up 4.08 Bn shares of the Indian affiliate at a price of INR 10 per share, the company said in a regulatory filing with the Taiwanese stock exchange. The announcement comes at a time when the company is looking at India as another base for iPhone production.

The infusion also comes amidst reports that Foxconn was looking to expand its operations in the country and quadruple its workforce in India over two years. With this, the manufacturer aims to increase its capacity for basic models and to meet the growing Indian demand.

The push from its Taiwanese parent also comes as pandemic restrictions and counter-protests have disrupted iPhone production at its facilities in China. The move could be attributed to Foxconn’s bid to scale up its operations to offset any damage emanating from delayed productions in China.

A portion of the amount could also be deployed to fulfil its obligations towards a memorandum of understanding (MoU) it recently signed with the Gujarat government to establish a $20 Bn semiconductor and display plant in the state.

Interestingly, the investment comes days after reports surfaced that Tata Group was in talks with Foxconn’s competitor, Wistron, to buy its manufacturing facility in Karnataka. CNBC earlier also reported that Apple executives were deliberating with Indian authorities to move some of the iPad’s production from China to the country.

So far, India produces the iPhone SE, iPhone 12, iPhone 13 and the basic model of iPhone 14. In terms of absolute numbers, Apple shipped close to 1.2 Mn India-manufactured smartphones in the second quarter of 2022, up 94% year-on-year (YoY).

In what has become emblematic of the shift to India, brokerage firm JP Morgan projects that one out of every four iPhones would be manufactured in India by 2025.

However, iPhone maker Foxconn also recently signed an MoU to invest $300 Mn in a Vietnamese manufacturer Kinh Bac City to expand its facilities in the north of the country. The bid to invest in the Indian subsidiary is also on the lines of such investment, which it aims to scale up to safeguard its interests.

The rumblings come as India treads slowly on the path of becoming a major manufacturing hub for iPhones. It is estimated that Apple’s bid to scale its manufacturing facilities in India could see the country nearly quadruple its iPhone production capacity to 20% of Apple’s global output in the near future.