Taiwan’s Foxconn will expand in India amid improvements in the overall industrial environment and an “upgrade in government efficiency,” chairman Young Liu said, underlining the South Asian nation’s growing importance for the world’s largest contract manufacturer amid tensions with China.
“We think India will play a very important role in the future. So, overall, I think our development in India, I see it actively heading in a positive direction–that is, it is going to get better and better,” Liu told investors and analysts during the company’s second-quarter earnings call last week.
He didn’t comment on any single product. “Overall, on India, our group’s development in India will be actively expanding,” Liu said, as per an edited earnings transcript.
Liu met Prime Minister Narendra Modi and officials in the Ministry of Electronics and IT (MietY) with updates on electric vehicle (EV) manufacturing and product expansion in electronics and semiconductor manufacturing.
ET had reported earlier that the company was building another facility inside its Foxconn Hon Hai facility near Chennai where it makes Apple phones. Apple has said the company witnessed a near-doubling of its India business as well as buoyancy in demand in the region in the second quarter.
Foxconn’s reiteration of its India commitment came amid a concerted push by Taiwan to strengthen ties with other countries as an increasingly belligerent China steps up military drills in the wake of a visit to the island nation by Nancy Pelosi, speaker of the US House of Representatives. China on Monday announced fresh high-intensity exercises around Taiwan after its president met with members of a US congressional delegation.
Foxconn has three sites in Tamil Nadu and Andhra Pradesh where it makes phones for Apple, Xiaomi and other electronic brands under various corporate entities. Its India-focussed entity Bharat FIH has filed for an IPO. Foxconn plans to manufacture display panels and semiconductor chips for electronic devices in partnership with mines and minerals group Vedanta.
“The current situation is a wake-up call for several Taiwanese companies who were till now unwilling to move out of China,” said Sana Hashmi, a postdoctoral fellow at the Taiwan-Asia Exchange Foundation. “I think Foxconn, due to it being more global in nature, has been a little more forthcoming than other companies (relatively smaller).”
Vietnam and Indonesia though can give India stiff competition when it comes to attracting Taiwanese businesses.
“The next stop should be Southeast Asia and India, but there are still structural problems,” she said. “While the tensions motivate Taiwanese companies to look towards India, there’s a lot more that needs to be done.”
Foxconn’s move to expand India manufacturing takes place amid a global supply chain reshuffle after the Covid-19 pandemic led to a chip shortage that’s seen lasting through this year. The US is looking to energise domestic electronics and semiconductor manufacturing through the new CHIPS and Science Act. An August 9 White House release said the Act would spur American businesses to commit $50 billion to make semiconductors in the US.