Taiwan’s Foxconn on Wednesday announced partnership with HCL Group to set up a semiconductor packaging and testing unit in India.
As part of the deal, Foxconn Hon Hai Technology India Mega Development, a subsidiary of Foxconn, will form a joint venture with HCL, wherein it will invest $37.2 million for a 40% stake, the former said in a filing at the Taiwan’s Stock Exchange.
The announcement from Foxconn assumes significance as the company had earlier planned to set up a $20 billion semiconductor fabrication unit with Anil Agarwal-owned Vedanta, which was later called off in July last year after the duo were not able to get a technology partner to make 28-nanometer chips, officials said.
Post the deal, Foxconn had also submitted a fresh proposal to the government to set up a semiconductor fabrication unit, the minister of state for electronics and IT Rajeev Chandrasekhar had said in the Parliament.
With HCL, Foxconn looks to set up an outsourced semiconductor assembly and test (OSAT) unit in the country. OSAT means the companies will be involved in chip packaging and testing services for semiconductor fabrication units.
HCL Group, however, did not comment on the investments it will be making in the joint venture.
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“HCL Group plans to partner with Foxconn Group to establish OSAT operations in India. HCL Group has a strong engineering and manufacturing heritage and this is an opportunity that provides strategic adjacency to the Group portfolio,” a spokesperson of the company said. “This is in line with the Government of India’s vision of Make in India and Atmanirbhar Bharat,” the spokesperson said, adding that more details will be shared at the appropriate time.
In November last year, Foxconn announced its plans to invest about $1.5 billion in India for operational needs.
Currently, the ministry of electronics and IT (MeitY) is evaluating two chip fabrication proposals, four OSAT proposals and three proposals for compound fabrication.
Lately, Tata Sons chairman N Chandrasekaran announced that the Tata group was also looking to set up a semiconductor fabrication facility in Dholera, Gujarat.
US-based semiconductor company Micron is also setting up its semiconductor assembly, testing, marking, and packaging (ATMP) plant in India. The company is expected to produce the first Made in India chip by the end of this year from its plant in Sanand, Gujarat.
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In a bid to boost the country’s semiconductor ecosystem, the government is bearing 50% of the project cost under its $10-billion semiconductor incentive scheme. Besides, different states have also rolled out their own semiconductor policies.
