Foxconn, a major Apple supplier, has received approval from the Indian government to establish a $435 million semiconductor plant in partnership with India’s IT giant HCL Group. This new facility will be located near the upcoming Jewar airport in Uttar Pradesh and is expected to begin operations by 2027.
The plant will focus on producing display driver chips, which are crucial for controlling how images, text, and videos appear on screens of mobile phones, laptops, automobiles, PCs, and other devices. It is designed to handle 20,000 wafers per month and produce around 36 million display driver chips monthly. Initially, since India currently lacks advanced chip fabrication capabilities, the plant will operate as an assembly and testing (OSAT) facility, packaging and testing chips manufactured elsewhere.
This joint venture marks the sixth semiconductor facility approved under India’s Semiconductor Mission, reflecting Prime Minister Narendra Modi’s push to develop India as a global electronics manufacturing hub and reduce reliance on China. The government sees this as a strategic move to boost domestic semiconductor production and foster an ecosystem involving design firms, equipment suppliers like Applied Materials and Lam Research, and chemical and gas providers such as Merck and Linde.
Foxconn, which began iPhone production in India in 2019 and has expanded its manufacturing footprint there, views this plant as a step toward eventually establishing full chip fabrication capabilities in India. Information Minister Ashwini Vaishnaw expressed optimism that the facility will pave the way for display panel manufacturing in India, potentially meeting 40% of the country’s demand and supporting Foxconn’s global supply chain.
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The plant is also expected to generate around 2,000 jobs and contribute significantly to India’s electronics manufacturing sector, which currently employs about 2.5 million people. The government provides fiscal incentives covering up to 50% of capital expenditure under its semiconductor scheme to encourage such investments.
This development comes amid broader efforts by Apple and its suppliers to diversify manufacturing away from China due to trade tensions and supply chain risks. Apple has already increased iPhone assembly in India and plans to expand production of other devices like AirPods there.
While India is making strides in semiconductor assembly and testing, full-fledged chip fabrication remains a challenge due to the high capital and technology requirements. Other large projects, such as those proposed by the Adani Group and Vedanta, have faced delays or cancellations. However, the government continues to invest heavily in semiconductor infrastructure, with a $15 billion incentive program underway to build multiple fabs and related facilities across the country.
In summary, the HCL-Foxconn joint venture is a significant milestone in India’s semiconductor ambitions, aiming to build a robust supply chain for display driver chips and eventually more advanced chip manufacturing, supporting both domestic needs and global technology supply chains.
