Foxconn eyes $1B investment for display assembly unit in TN
What's the story
Taiwanese contract manufacturer, Foxconn, is planning a $1 billion investment to establish a smartphone display module assembly unit in Tamil Nadu. This facility will be the first of its kind in India, and will be primarily intended to serve Apple's iPhone production needs. The business model will also allow other contract manufacturers like Pegatron and Tata Electronics, to source components from this unit instead of importing from China.
Industry impact
New facility to boost India's electronics manufacturing sector
Foxconn has secured approximately 500,000 square feet at a plug-and-play facility at the ESR Oragadam Industrial & Logistics Park, adjacent to its smartphone assembly unit near Chennai. The new venture is expected to significantly enhance India's position in electronic assembly and manufacturing. Tarun Pathak, Research Director at Counterpoint, stated that while phone assembly contributes about 5% local value add, display assembly could provide an additional value add of 2-3%.
Strategic growth
Foxconn's expansion strategy and impact on India's import reliance
The establishment of the new unit is seen as a strategic move by Foxconn to streamline its operations, as it prepares to assemble Google Pixel phones in India. The company is aggressively expanding its smartphone business in the country, while also aiming to lead in sectors such as information and communication technology (ICT), electric vehicles (EVs), batteries, semiconductors, and more. This development could significantly reduce India's reliance on imports for display needs.
Strategic alignment
Foxconn's move aligns with Apple's diversification strategy
The new facility could help manufacturers reduce their time to market/supply cycles for brands, thereby decreasing their own lead times and costs. Currently, India relies on imports from China (60-65% across segments and up to around 90% in certain segments) and South Korea (the second-largest supplier at 20-25%) for its display needs. Foxconn's expansion in India aligns with Apple's strategy to diversify away from China, as the latter has been focusing on India via partners like Foxconn.