Foxconn, the prominent partner of Apple, has revealed its plans to invest a whopping $1.54 billion in India. This substantial investment comes as part of Foxconn’s expansion strategy to capitalize on the burgeoning Indian market, which has witnessed a surge in revenues.
Key Takeaway
Foxconn, Apple’s partner and the largest EMS provider globally, plans to invest
.5 billion in India to fulfill operational needs. This investment signifies Foxconn’s commitment to India and supports its “Make in India” campaign. The surging revenues from the Indian market emphasize the importance of a diversified production base. Foxconn’s continuous expansion reinforces its position as a dominant player in the EMS sector.
Expanding Presence in India
In a recent stock exchange filing, Foxconn expressed its intention to utilize this investment to meet its operational requirements effectively. This move comes merely two months after the Taiwanese company announced its decision to double its workforce and increase investments in India by next year.
Foxconn operates numerous manufacturing plants in India and collaborates with various companies, including Apple, to assemble their devices. Many global tech giants are looking to shift a portion of their manufacturing operations to India, a trend described by analysts as “China+1.” This strategic move aims to diversify production bases and mitigate risks associated with the US-China trade tensions.
Reassurance and Commitment to India
Although Foxconn recently pulled out of a $19.5 billion chipmaking joint venture with Vedanta, it remains resolute in its support of India’s ambitions. The company expressed confidence in the Indian market and its commitment to the government’s “Make in India” campaign.
Foxconn stated, “Building fabs from scratch in a new geography is a challenge, but Foxconn is committed to investing in India. We have been dealing with challenges like this since the 1980s. Foxconn has no intentions other than to continuously support the government’s ‘Make in India’ drive and establish diverse local partnerships that meet the stakeholders’ needs.”
Continuous Expansion and Revenue Growth
In August, Foxconn announced its plans to invest $600 million in two projects in the southern Indian state of Karnataka. These projects will focus on chip-equipment manufacturing and casing components for iPhones.
Recent reports by Goldman Sachs analysts highlight the upward trajectory of Foxconn’s India revenues. Revenues from India for the third quarter of 2023 showed a remarkable 53% year-on-year increase, amounting to NT$62 billion. This upward trend in India revenue contributions is expected to reach 3.3% in 9M23, compared to approximately 2% in 2021-22A.
This rising revenue contribution reflects the increasing demand from global-tier clients for a diversified production base. Furthermore, Hon Hai’s (also known as Foxconn) global footprint enhances its position as a leading market player in the electronic manufacturing services (EMS) sector.
