Foxconn technical Group, the primary supplier to Apple Inc., intends to expand its investments in southern India’s Karnataka state to more than $1.2 billion and establish two component plants there, continuing a steady diversification from China to reduce the risks of US economic and technical sanctions.
According to those with knowledge of the situation, at least one of the factories that the Taiwanese business intends to build in Karnataka will manufacture Apple components, including those for iPhones. According to the persons, who requested anonymity since the situation is private, a formal announcement might be made as soon as this week. The location of the second plant, which would also be in Karnataka, is still to be determined.
In addition to a $700 million facility it plans to erect on a 300-acre site near the airport in Bengaluru, the capital of Karnataka, Foxconn is investing $500 million in these two facilities, according to a previous Bloomberg News article. It is anticipated that this plant will build iPhones and generate roughly 100,000 employment.
The extra locations will push the Apple partner’s anticipated new spending for India north of $1.2 billion, a significant investment for a Taiwanese company that typically sources the majority of its components from central and southern China to manufacture products for Apple and other US brands.
The activities of Foxconn in India demonstrate how the South Asian country has quickly emerged as a favourite location for businesses looking for a substitute for China in the face of rising tensions between Washington and Beijing. Additionally, it’s the outcome of a change in the world’s supply chain that increased during the Covid-19 outbreak and the war in Ukraine, and it may change how electronics are produced.
A request for comment from Apple was not answered. When asked for response through email, Foxconn didn’t reply. An after-hours request for feedback from the Karnataka state administration was not answered.
Foxconn and other Apple suppliers have increased their operations in India over the past few years as a result of incentives offered by Prime Minister Narendra Modi to encourage domestic manufacture. In the southern state of Tamil Nadu, Foxconn and its smaller Taiwanese rival Pegatron Corp. both run iPhone assembly plants. Other governments, like Karnataka, have also wooed businesses by making decisions quickly, reducing red tape, and offering subsidies.
Separately, the state’s industries ministry announced on Monday that a Foxconn subsidiary had also signed an initial deal with the government of Tamil Nadu’s southern region to establish its own components plant with an investment of 16 billion rupees ($195 million). Approximately 6,000 jobs will likely be created by the project.
The government of Narendra Modi sees an opportunity to close India’s technological gap with China as Western investors and corporations grow weary of Beijing’s unpredictable regulations, slowing economy, and US trade restrictions. Foxconn’s decision suggests suppliers may move capacity out of China much faster than expected.
The world’s largest producer of Apple’s iconic device, Foxconn’s huge iPhone assembly plant in the Chinese city of Zhengzhou, currently employs some 200,000 people, though that figure increases during peak production season.
Due to disruptions caused by Covid, output at the Zhengzhou plant fell ahead of the year-end holidays in 2022, which was one of numerous things that prompted Apple to review its China-dependent supply chain.
