Foxconn and HCL Group to come up with chip packaging, testing joint venture

Foxconn is partnering with HCL Group to kick start a chip packaging and testing venture in India.

Foxconn will invest $37.2 million for a 40% stake in the joint venture, as per a regulatory filing to Taiwan’s stock exchange. The chip packaging and testing venture, known as OSAT in industry lingo, comes after Foxconn abandoned a joint venture with India’s Vedanta in July.

The Taiwanese manufacturer has also submitted applications to set up a semiconductor fabrication unit in India under the PLI scheme, as Rajeev Chandrashekhar, Minister of IT, disclosed in the parliament in December.

At present Foxconn is largely into manufacturing iPhones in India. As a part of its China+1 strategy like many tech firms that wish to diversify their supply chains amidst US-China tensions, it has moved part of its operations to India.

Along with Tata and Pegatron, Foxconn is the contract manufacturing partner for Apple in India. Foxconn contributes to 68% of the total production of iPhones in India.

Last November, Foxconn also announced that it would invest another $1.6 billion as part of its China+1 push.

While the exact specifics of the investments were not known. For Apple products specifically, it is also planning to invest Rs 8,800 crore in Karnataka to set up an iPhone component unit, which will create 14,000 new jobs. It is also looking at other sites in Tumakuru city, Karnataka, to manufacture other iPhone accessories.