Apple iPhone maker Foxconn suggests it may invest billions of dollars in India, a month after withdrawing from planned chip fab
Taiwan’s Foxconn has made clear it is not finished investing in India, in a move that will please the government of Prime Minister Narendra Modi.
CNN reported that during an earnings call, Foxconn Chairman Young Liu said his firm is planning “billions” of dollars in investments in India.
The news will be of concern to Beijing, and comes after China reported increasingly worrying economic data, as well as confirming a dire demographic decline to its population in the years ahead.
Foxconn’s confirmation of investments in India may surprise some, considering that in July it had exited an ambitious project to help build one of India’s first chip factories.
Foxconn had last year signed a pact with Vedanta to set up semiconductor and display production plants in Modi’s home state of Gujarat.
Foxconn said it had worked with Vedanta for more than a year to bring “a great semiconductor idea to reality”, but last month they had mutually decided to end the joint venture and it will remove its name from an entity that is now fully owned by Vedanta.
The withdraw had been a blow to the Indian chipmaking hopes of Prime Minister Modi.
But Foxconn is still a significant investor in India and has more than 30 factories in the country, including 20 dormitories that house tens of thousands of workers.
It began its Indian operations in 2006.
Indeed Foxconn’s India operations account for about $10 billion – or just under 5 percent – of the company’s annual turnover, which stood at $6.627 trillion new Taiwan dollars ($207 billion) last year, Chairman Young Liu was quoted as saying by CNN on the Monday earnings call.
Billions of dollars
Liu then touted more investment in India.
“There is a positive energy for this market,” he said in response to a question from CNN. “From the perspective of India’s potential market size and if we can fully implement our plans there, I think several billion dollars in investment is only a beginning.”
Liu reportedly said he saw opportunities to expand Foxconn’s business producing key components for consumer electronics and also in electric vehicles (EVs), which is a major growth area for the company.
In March that Foxconn said it will build a new 300-acre facility in Bengaluru, India to manufacture ‘electronics’, thought to be iPhone parts.
Prior to that in December 2022, Foxconn said it may move as much as 30 percent of its manufacturing capacity out of China to India, Vietnam and Brazil as it and other electronics manufacturers seek to diversify and limit supply chain disruption caused by geopolitical tensions and public health challenges
Foxconn reportedly began the multiyear diversification effort before the Covid-19 pandemic, with India emerging as an attractive manufacturing base due to its large population and high birth rate.
Last September Apple said it it had begun manufacturing its current-model iPhones in India for the first time.
Vietnam meanwhile offers lower labour costs than China, and now has 21 Apple suppliers operating in the country, although it can’t yet produce the iPhone.