Foxconn, the largest contract electronics manufacturer globally, has gained approval from the Indian government to establish a semiconductor plant in collaboration with HCL Group, involving an investment of 37.06 billion rupees ($433 million). The facility, set to be constructed in Uttar Pradesh, a northern state in India, is expected to be operational by 2027, as stated by Ashwini Vaishnaw, India’s information minister, during a cabinet briefing on Wednesday.
This agreement comes as Apple suppliers, including Foxconn, are increasingly looking towards India as they shift away from China due to ongoing trade tensions between Beijing and Washington. Vaishnaw mentioned that the plant will produce Foxconn’s display driver chips, which are utilized in mobile phones, laptops, automobiles, PCs, and various consumer electronics.
China likely to face challenges from Trump tariff in future
According to the minister, the plant is designed to manufacture up to 20,000 wafers and 36 million display driver chips each month. Wafers are thin, circular slices of semiconductor material, typically silicon, that serve as the foundation for chips.
Reports indicate that Apple has been working to relocate most of its iPhone production to India, as its manufacturing in China faces challenges from U.S. President Donald Trump’s tariffs on the nation. By the end of 2025, India could represent approximately 15%-20% of total iPhone production, as per Bernstein analysts. Evercore ISI estimates that currently, 10% to 15% of iPhones are assembled in India.
While many of Apple’s key products, such as smartphones and computers, received exemptions from Trump’s “reciprocal tariffs” last month, officials have cautioned that these exemptions may be temporary. The U.S. Commerce Department is conducting a national security review of semiconductor technology imports and related downstream products, which could lead to new tariffs.
During Trump’s current term, U.S. imports from China are subject to an additional 30% tariff, while most other countries, including India and Vietnam, face a 10% rate.
