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Tamil Nadu and Telangana Foxconn-HCL on Radar for New Chip Factory

CIO Insider Team | Friday, 19 January, 2024
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Taiwanese contract electronics giant Foxconn is joining forces with HCL Group to set up a semiconductor assembly and testing facility in India. This marks a major shift in the global technology industry. Foxconn announced the development in an official announcement.

Some electronics manufacturers are eyeing India as they look to gradually diversify away from China, the world's largest manufacturing hub. Industry veterans say the country is witnessing a new dawn in the industry. The global electronics supply chain is largely concentrated in Southeast Asia.

Apart from providing a huge market for companies, India's huge workforce and vibrant presence of micro, small and medium enterprises can benefit the country despite strong competition from countries like Malaysia, Vietnam and Indonesia.

Since 2020, giants such as Cisco, Taiwan's Delta Electronics, Apple suppliers Pegatron and China's Luxshare have entered India to manufacture various electronic devices, including wearables, headsets, network switches and routers. Global chip giant Micron is setting up a semiconductor factory (fabs) in Gujarat, while Foxconn is looking for a location after exiting its joint venture with Vedanta.

Three years later, India is an integral part of Apple's ecosystem, with the country's smartphone exports estimated at 7 percent, down from just 1 percent in 2020.

However, Foxconn’s current collaboration with HCL Group marks a new effort to gain a foothold in India's fast-growing semiconductor market

Cisco will start manufacturing through a contract manufacturer in Chennai in the coming months, while Luxshare is hoping for a manufacturing vision after acquiring Motorola's factory in Tamil Nadu.

Foxconn has massively expanded its Sriperumbudur unit, which employs more than 35,000 people to assemble several Apple iPhone models, and is now expanding to Karnataka and Telangana, where the Taiwanese giant not only assembles smartphones but also manufactures advanced electronic components.

However, Foxconn’s current collaboration with HCL Group marks a new effort to gain a foothold in India's fast-growing semiconductor market. The move is also in line with India's ambitions to become a major player in semiconductor manufacturing and technology development globally.

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