Foxconn, a major manufacturing partner for Apple, has received official approval from India’s cabinet to establish a semiconductor facility in partnership with India’s IT giant, HCL Group. This ambitious project, valued at approximately 37 billion Indian rupees ($435 million), marks yet another significant step in Apple’s ongoing effort to diversify its global supply chain and reduce manufacturing reliance on China.
The planned facility will be situated close to the Jewar airport in the northern state of Uttar Pradesh and is projected to become operational by 2027. Initial operations at the site will focus on outsourced semiconductor assembly and test (OSAT) services. These involve testing and packaging semiconductor components produced elsewhere, given India currently lacks advanced chip fabrication infrastructure.
India’s IT minister, Ashwini Vaishnaw, emphasized at a recent press conference in New Delhi that although the plant will not begin its activities as a full-fledged chip fabrication facility, it represents a critical precursor to developing homegrown advanced semiconductor manufacturing capabilities. The facility will initially handle display driver chips—essential components managing visual outputs on devices such as smartphones, tablets, laptops, automobiles, and computer monitors.
Minister Vaishnaw explained that once operational, the facility could eventually process around 20,000 semiconductor wafers per month, equating to approximately 36 million units monthly. He highlighted that setting up this dedicated facility positions India to attract further investment in advanced chip manufacturing, particularly involving production of the critical display panels themselves in the future.
Apple currently views India as a key player in its strategic move to mitigate the risks posed by global trade tensions, most notably between the United States and China. Recently, Apple CEO Tim Cook briefly touched upon these considerations, suggesting that expansion of manufacturing into India could help mitigate the need for drastic increases in device pricing related to existing tariff pressures.
The facility’s final incentive arrangements and support packages from the Indian government have not yet been disclosed. Still, India has been active in committing substantial financial backing to attract semiconductor investments. Under its semiconductor manufacturing initiative, India offers significant support covering up to 50% of the capital expenditure necessary for establishing semiconductor plants.
Foxconn’s involvement builds upon an initial proposal announced by its affiliate Hon Hai Technology India Mega Development last year, investing approximately $37.2 million for a 40% stake in the venture with HCL Group. This latest approval aligns with a broader push from India recently to ramp up semiconductor capabilities. Last year, the government greenlit a 33-billion rupee ($386 million) semiconductor initiative by Kaynes Semicon, and in February, committed up to 1.26 trillion rupees ($15 billion) towards developing infrastructure for India’s first generation of semiconductor fabs.
Details on the next phase of India’s semiconductor incentive scheme remain forthcoming, with industry stakeholders watching closely for further government initiatives aimed at establishing the country as a more prominent global semiconductor manufacturing hub.
