Apple partner Foxconn to invest $1.5 billion in India

Foxconn plans to invest $1.54 billion in India, the latest in its growing expansion plans, following a surge in revenues in the South Asian market.

Foxconn said in a stock exchange filing that the investment will help it meet “operational needs.” The investment comes two months after the Taiwanese company said it plans to double its workforce and investment in India next year.

Foxconn works with several companies including Apple and assembles their devices in Indian plants as many tech giants look to shift part of their manufacturing base to India in a move which analysts described as “China +1.”

Investment from Foxconn, which is the largest EMS provider in the world, to China increased from 2001-2017 or more than 15 years, and has slowed down since 2018, due to the US-China trade tension.

The company, which operates three manufacturing campuses in India, pulled out of a $19.5 billion chipmaking joint venture with Vedanta earlier this year, but said it remains “confident” about its India ambitions.

“Building fabs from scratch in a new geography is a challenge, but Foxconn is committed to investing in India. We have been working on challenges like this since the 1980s. Foxconn has no intention of doing the anything but continue to support the government’s ‘Make in India’ ambitions and build a diversity of local partnerships that meet the needs of stakeholders,” said Foxconn, also known as Hon Hai. .

Last August, the company announced plans to invest $ 600 million in two projects in the state of Karnataka in South India for the production of chip-equipment and casing components for iPhones.

For 3Q23 (the most recent quarter, whose results were revealed earlier this month) regional revenues, we see revenues from India continue to grow, at NT$62bn, or + 53% YoY from a lower base, leading India’s revenue contribution to increase. to 3.3% in 9M23 compared to ~2% in 2021-22A, Goldman Sachs analysts wrote in a recent report.

“The increase in contribution reflects the global level of clients’ needs in a diversified production base, and we see Hon Hai’s global footprints better securing its leading position in the EMS market.”

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