Foxconn takes bold leap beyond product assembly: Taiwanese giant eyes expansion of key components in India

Foxconn, the global technology giant also known as Hon Hai, is set to expand its presence in India by venturing beyond product assembly and diving into key component production. The company, which initiated its operations in India back in 2005, has witnessed remarkable growth in terms of revenue, workforce, and investment in the country. This strategic shift was confirmed by Young Liu, the CEO and Chairman of Hon Hai Technology Group, during a recent quarterly earnings conference call. Although Foxconn is renowned for its role as a primary supplier to Apple and other smartphone manufacturers, it is now poised to take a proactive stance in India's competitive market by focusing on essential components.

Currently, Foxconn's operations are concentrated in the states of Andhra Pradesh and Tamil Nadu, with plans to expand further into regions such as Karnataka and Telangana. Collaborating closely with both central and local government bodies, the company aims to establish industrial complexes that enhance the business environment through improved infrastructure, policies, and legislative frameworks.

In a notable development, Foxconn's board has recently approved an additional investment of $400 million in the state of Telangana, increasing the cumulative investment in the region to $550 million. This new facility is intended to serve as a pivotal hub for Foxconn Interconnect Technology's operations, contributing to the expansion of production capacity in Telangana.

Beyond its core activities in contract manufacturing, Foxconn has also entered the semiconductor domain. While its joint venture with Vedanta, led by Anil Agarwal, has been discontinued, the company remains committed to India. It is actively pursuing new collaborations to drive its semiconductor initiatives within the country. Sources suggest that Foxconn is considering the establishment of multiple semiconductor fabrication lines in India.

In late July, Foxconn's Chairman Young Liu participated in the inaugural keynote of the second edition of the Semicon India event held in Gandhinagar, Gujarat. Liu shared the stage with Indian Prime Minister Narendra Modi and Sanjay Mehrotra, President and CEO of Micron, among other industry leaders. During the event, Liu affirmed, "Taiwan is and will be your most trusted and reliable partner."

Alongside its endeavours in India, Foxconn is steadfastly committed to implementing the Build-Operate-Lease (BOL) strategy across Southeast Asian countries like Vietnam, Thailand, and Indonesia. This initiative aims to strengthen local partners' supply chains and enhance indigenous competitiveness. The company is also actively engaged in sharing global resources with its partners, with the goal of expanding local market presence and achieving mutual milestones.

Pegged to be a traditionally off-peak season for the company, in the second quarter of 2023, Hon Hai’s total revenue totalled New Taiwan dollar NT $1.3045 trillion (approx. $40.85 billion), down 14 per cent on year. Gross profit, at NT$83.6 billion (approx. $2.62 billion), fell 14 per cent at the same time; operating income was NT $30.9 billion (approx. $967.2 million), down 30 per cent; while net profit fell 1 per cent from a year ago to NT$33.0 billion (approx. $1.03 billion). Both gross profit margin and net profit margin rose compared to a year ago, to a respective 6.41 per cent, and 2.53 per cent from a respective 6.40 per cent and 2.21 per cent. However, operating profit margin declined to 2.37 per cent from 2.94 per cent for the same period. (1 US $ = 31.95 NT$)