Foxconn With HCL Group To Establish OSAT In India

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  • The partnership will provide benefits to Foxconn’s BOL (build-operate-localise) model
  • The central government initiated a $10-billion production-linked incentive (PLI) scheme in 2021

Foxconn Technology Group and HCL Group have planned to set up a semiconductor outsourced assembly and testing (OSAT) unit in India.

Foxconn has planned to invest $37.2 million, securing a 40 per cent equity stake in the venture. This investment aims to make an OSAT facility that will contribute to India’s semiconductor industry and enhance supply chain resilience.

The partnership will provide benefits to Foxconn’s BOL (build-operate-localise) model, emphasising community support in establishing OSAT operations in India.

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The announcement has been made following the Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar’s recent announcement about the Indian government that it has received nine proposals for various semiconductor fabrication units and testing plants in India.

The central government also shared a $10-billion production-linked incentive (PLI) scheme in 2021 to provide financial assistance to semiconductor manufacturers in India.

Micron Technology has also announced $825 million for its assembly, testing, monitoring, and packaging plans in the country.

The Sanand unit of Micron is estimated to create 5,000 direct and 15,000 indirect employment opportunities in Gujarat over the next five years.

Initially, Foxconn planned for a $20 billion semiconductor fabrication unit in partnership with Vedanta Ltd. Now the company has committed to expand beyond contract manufacturing and is now focusing on its OSAT (Outsourced Semiconductor Assembly and Test) business to enhance profitability.

Currently, Foxconn has entered into a non-binding memorandum of understanding for a joint venture with the HCL Group, with negotiations expected to follow. This collaboration is part of the growing interest and investment in India’s semiconductor industry and aims to bolster the country’s semiconductor capabilities.

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