Foxconn has secured formal approval from the Indian government to construct a $435 million (37 billion Indian rupees) semiconductor facility. This strategic project, a joint venture with the HCL Group, marks a significant milestone in Apple’s ongoing efforts to diversify its supply chain and reduce manufacturing dependency on China.
Strategic Location and Operational Goals
The upcoming plant will be situated near the Jewar airport in Uttar Pradesh. According to India’s IT Minister, Ashwini Vaishnaw, the facility is slated to begin operations by 2027. Its primary function will involve the manufacturing of display driver chips—essential components that dictate how visual content appears on mobile phones, laptops, PCs, and automotive displays.
From Assembly to Fabrication
While the facility represents a major industrial investment, it will initially operate as a Semiconductor Assembly and Test (OSAT) unit. Because India currently lacks advanced chip fabrication capabilities, the plant will focus on packaging and testing chips produced elsewhere. However, Minister Vaishnaw emphasized that this is a foundational step toward establishing full-scale domestic chip fabrication.
“Once this unit is operational, local display panel manufacturing will follow,” Vaishnaw stated. The plant is projected to reach a capacity of 20,000 wafers per month, yielding approximately 36 million units monthly.
Reducing Reliance on China
This development aligns with Apple’s broader strategy to navigate geopolitical trade tensions. Apple CEO Tim Cook has frequently cited India as a critical hub for future manufacturing and assembly, viewing it as a buffer against potential tariff-related price hikes, even as the company evaluates potential consumer price adjustments.
Apple has already ramped up local iPhone assembly in India, with a significant portion of production exported to the U.S. and other global markets. Future expansion plans include the production of additional devices, such as AirPods.
Government Incentives and Industry Growth
The joint venture benefits from India’s semiconductor scheme, which offers fiscal support covering up to 50% of capital expenditure for facility setup. Foxconn’s subsidiary, Hon Hai Technology India Mega Development, previously announced a $37.2 million investment to secure a 40% stake in this venture.
This approval follows a series of government-backed semiconductor initiatives, including the Kaynes Semicon project in Gujarat. While the Indian government has already allocated $15 billion toward its semiconductor incentive program, the industry is now awaiting details regarding the second phase of these national manufacturing subsidies.