Foxconn Technology Group and HCL Group have announced intentions to form a joint venture (JV) for a semiconductor outsourced assembly and testing (OSAT) facility in India. Foxconn plans to invest $37.2 million, gaining a 40% equity position in the firm, according to Mint and The Economic Times. The plan aims to create an OSAT facility to benefit India's semiconductor sector and improve supply chain resilience.
HCL Group sees this relationship as strategically linked with its current portfolio. The cooperation will use Foxconn's BOL (build-operate-localize) approach, with a focus on community support while launching OSAT operations in India.
The statement follows the recent revelation by Rajeev Chandrasekhar, Minister of State for Electronics and Information Technology, that the government has received nine proposals for various semiconductor manufacture and testing facilities in India. In 2021, the central government launched a $10 billion production-linked incentive (PLI) initiative to help Indian semiconductor producers.
Micron Technology Inc. has already allocated $825 million to its assembly, testing, monitoring, and packaging plans in the country. Micron's Sanand facility is expected to produce 5,000 direct and 15,000 indirect jobs in Gujarat over the next five years.
Foxconn previously planned a semiconductor fabrication unit in collaboration with Vedanta Ltd. However, this alliance, which planned to invest $20 billion in the business, suffered a setback last year when the two companies disbanded their joint venture. Despite this, Foxconn remains committed to diversifying outside contract manufacturing, with the OSAT sector viewed as a way to increase profits, according to a spokeswoman.
The partnership between Foxconn and HCL Group is now outlined in a non-binding memorandum of intent, with discussions to follow. As the semiconductor industry continues to attract interest and investment in India, the collaboration intends to strengthen the country's semiconductor capabilities.
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