Foxconn plans to invest $1.54 billion in India, the latest in its growing expansion plan, following a surge in sales in the South Asian market.
Foxconn said in a stock exchange filing that the investment will help it meet “operational requirements”. The investment comes two months after the Taiwanese company said it would double its workforce and investment in India by next year.
Foxconn works with many companies, including Apple, assembling their devices at plants in India as many tech giants look to shift part of their manufacturing base to India in a move that analysts have dubbed “China+1”.
Investment in China by Foxconn, the world’s largest EMS provider, rose between 2001 and 2017, or over 15 years, and has slowed since 2018 amid trade tensions between the US and China.
The company, which operates three manufacturing campuses in India, pulled out of a $19.5bn chip-making joint venture with Vedanta earlier this year, but said it remained “confident” in India’s ambitions.
“Building factories from scratch in a new geography is challenging, but Foxconn is committed to investing in India. We have been working on such challenges since the 1980s. Foxconn has no intention of doing anything other than continuing to strongly support the government’s ‘Make in India’ ambitions and establish a variety of local partnerships that meet the needs of stakeholders,” Foxconn, also known as Hon Hai, said at the time.
In August, the company announced plans to invest $600 million in two projects in the southern Indian state of Karnataka to manufacture chip equipment and iPhone housing components.
For 3Q23 (the latest quarter, the results of which were announced earlier this month) revenue by region, we see India’s revenue continuing to rise to NT$62 billion, or +53% year-on-year from a low base, resulting in India’s revenue contribution rising to 3.3% in 9M23 from ~2% in 2021-22A, Goldman Sachs analysts wrote in a recent report.
“The rising contribution reflects the needs of global customers for a diversified manufacturing base, and we see Hon Hai’s global footprint better securing its leading market position in EMS.”
