Foxconn is investing another $500 million in its India business as it ramps up its plans to expand its chipmaking factories in the South Asian market that is slowly becoming a key hardware hub for Apple.
In a stock exchange filing in Taiwan on Thursday, Foxconn said its Singapore subsidiary is deploying the capital into the India entity, Hon Hai Technology India Mega Development Private Limited.
The move follows Foxconn, also known as Hon Hai, picking up pace to expand its smartphone production capacity in India as key partner Apple begins locally producing the current generation iPhone units in the country.
In late September, Apple began assembling the iPhone 14 models in India, locally producing the current lineup for the first time in the same calendar year in the world’s second largest smartphone market.
Analysts estimate that Apple will turn India into a global iPhone manufacturing hub by 2025 as it slowly cuts its reliance on China, where it has been producing the vast majority of its devices for over a decade. In a September report, JP Morgan analysts said Apple will move 5% of global iPhone 14 production to India by late 2022 and expand its manufacturing capacity in the country to produce 25% of all iPhones by 2025.
In a report Wednesday, Morgan Stanley analysts echoed many similar estimations, saying, Apple’s goal is to have India “contribute up to 10% of total iPhone production in 2-3 years.”
Foxconn also recently signed a memorandum of understanding with the Indian state of Gujarat to set up a $20 billion semiconductor and display unit in the coastal state that is home of Prime Minister Narendra Modi.
Foxconn said it will bring technical expertise to the venture whereas Vedanta, known for its mining business, will finance the project, top officials said. The state of Gujarat will offer subsidies on capital expenditure and electricity to the project.