Monday, February 26, 2024

Foxconn gets nod to infuse $1 billion more in Apple India plant: Report

Foxconn Technology Group has received approval to invest $1 billion additional funds into its upcoming facility in India, dedicated to the manufacturing of Apple products. This substantial augmentation represents a noteworthy stride in its strategic initiative to establish a key manufacturing hub beyond China, according to reports from Bloomberg.

The latest advancement comes in the wake of the Karnataka state government’s formal approval of a substantial $1.67 billion investment, underscoring Foxconn’s resolute dedication to expanding its operations in the region. 

The Taiwan-based tech giant, who is recognized for assembling around 70% of global iPhones and holding the esteemed title of the largest contract manufacturer globally, is unwavering in its commitment to diversifying production away from China. This strategic shift is a direct response to the challenges posed by the COVID-19 pandemic and the escalating tensions on the geopolitical front.

In the last twelve months, Foxconn has considerably strengthened its footprint in India, channeling substantial investments into manufacturing facilities in the southern region of the country. 

Specifically, in Karnataka state, the company announced in August its decision to invest $600 million across two projects, focusing on the production of casing components for iPhones and specialized chip-making equipment.

Scheduled to initiate iPhone manufacturing by April 2024 in the southern state, this initiative is projected to create approximately 50,000 employment opportunities. Sources aware about the situation indicate that the recently acquired funds are likely to support enhanced capacities for a range of Apple devices, potentially including the renowned iPhone. However, specific details remain undisclosed due to the confidential nature of the information.

With this recent infusion of funds, Foxconn’s investment in the facility is set to reach around $2.7 billion, solidifying its position as a pivotal element in the company’s manufacturing landscape in India. 

This underscores a broader trend observed not only within Foxconn but also among major manufacturing players, as they shift capacities away from China in response to economic challenges and heightened tensions with the United States.

Foxconn, a crucial manufacturing partner for Apple, has revised its investment plans for the plant at least once this year. Originally slated for a $700 million investment at the beginning of 2023, the substantial increase highlights the company’s unwavering commitment to meeting the demands of its crucial partnership with Apple. 

While the primary focus is on Apple products, a portion of the investment is expected to be allocated for the production of devices and components, including parts for electric vehicles, catering to other clients.

This strategic move by Apple’s key partners reflects an accelerated effort to establish a robust supply chain in India, coinciding with a gradual exodus of Chinese firms amid strained relations between Beijing and New Delhi. Tata Group, another significant Apple collaborator, is actively working towards establishing one of India’s largest iPhone assembly plants in Tamil Nadu.

 

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Published: 13 Dec 2023, 02:41 PM IST

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