
Foxconn and HCL Group Collaborate on Chip Testing Plant in India
- Foxconn, HCL to build semiconductor facility in India.
- Foxconn invests $37.2 million for 40% stake in joint venture.
- Aim: Strengthen India’s semiconductor supply chain.
Foxconn, the Taiwanese multinational electronics contract manufacturer (2317.TW), revealed plans to collaborate with the technology firm HCL Group to establish a semiconductor assembly and testing facility in India. The companies will join forces to set up an outsourced assembly and testing (OSAT) unit in the South Asian nation.
An OSAT plant plays a crucial role in the semiconductor manufacturing process by packaging, assembling, and testing silicon wafers produced by foundries, transforming them into fully functional semiconductor chips.
According to a regulatory filing by Foxconn, its India unit will hold a substantial 40% stake in the joint venture, committing a significant $37.2 million investment. Financial details from HCL Group’s perspective were not disclosed.
In a statement, Foxconn highlighted the strategic objective of the collaboration, stating, “Through this investment, the partners aim to build an ecosystem and foster supply chain resilience for the domestic industry.”
The proposed project’s location, however, remains undisclosed at this time.
This collaboration comes as part of Foxconn’s broader ambitions in the Indian semiconductor sector. The company is also exploring the establishment of a semiconductor fabrication plant in India, capitalizing on the Indian government’s enticing offer of $10 billion in incentives to promote local chip manufacturing.
It is worth noting that Foxconn’s foray into the Indian semiconductor landscape encountered challenges last year when it experienced a high-profile split with local conglomerate Vedanta (VDAN.NS). The split pertained to a $19.5 billion chipmaking joint venture, marking a rocky start to Foxconn’s semiconductor endeavors in the country.
As the demand for semiconductor components continues to surge globally, partnerships like the one between Foxconn and HCL Group underscore the industry’s recognition of India’s potential as a significant player in the semiconductor manufacturing ecosystem. The collaboration aims to contribute to the development of a robust supply chain and strengthen the domestic industry’s resilience.
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