Foxconn's $600 mn Investment in Karnataka Boosts Components and Chipmaking Machinery

Foxconn, the world's largest contract manufacturer responsible for assembling around 70% of iPhones, has announced a significant investment of $600 million (approximately ~4,938.12 crore) in Karnataka, India. The investment will be divided between two projects aimed at producing casing components for iPhones and chip-making equipment, marking Foxconn's increasing interest in the south Asian nation as it looks to diversify its operations beyond China.

The first project will involve $350 million to set up an iPhone component facility, expected to generate 12,000 job opportunities. The second project, in collaboration with Applied Materials, will focus on manufacturing chip-making tools and will receive $250 million in investment.

The investment decision follows a meeting between Foxconn Chairman Young Liu, Karnataka's IT minister Priyank Kharge, and Industries Minister MB Patil. Foxconn's chairman expressed excitement about the possibilities that Karnataka offers for the company's expansion plans in India.

The move aligns with a growing trend of foreign companies, including Micron and Amazon, investing billions of dollars in India to capitalize on the country's growing consumption and demand. Prime Minister Narendra Modi's efforts to attract semiconductor manufacturing investors are also driving this influx of investment.

In addition to the projects in Karnataka, Foxconn is also planning to collaborate with Applied Materials to create a semiconductor manufacturing equipment project in the state, creating around 1,000 job opportunities.

Moreover, Foxconn is exploring the potential of applying for incentives under the Indian government's $10-billion scheme to promote chip manufacturing. The company is also in discussions with Gujarat to establish a chipmaking facility.

Furthermore, Tamil Nadu has announced that Foxconn will invest $194 million in a new electronic components manufacturing facility, generating 6,000 jobs.

These developments signify a significant shift in Foxconn's production strategy, as the company diversifies its operations away from China due to Covid-related disruptions and geopolitical tensions. The company's expansion in India is expected to boost the country's manufacturing sector and strengthen its position as a prominent player in the global tech industry.