After Karnataka, Foxconn Industrial Internet in talks with Tamil Nadu

After announcing a mega project worth Rs 8,800 crore in Karnataka, Taiwan-based Hon Hai Technology Group’s Foxconn Industrial Internet (Fii) plans to forge an electronic components unit in Tamil Nadu.

Fii CEO Brand Cheng held a meeting with Chief Minister of Tamil Nadu Mk Stalin and Minister of Industry, Investment Promotion and Trade TRB Raja in this regard on Wednesday. This is part of the group’s larger strategy to strengthen its presence in India. In the past few months, Foxconn has announced major investment plans in states such as Karnataka, Telangana and Tamil Nadu, strengthening its presence in South India. Early this week, FII proposed a unit innovation at Tumakuru in Karnataka state near Bengaluru with an investment of Rs 8,800 crore.

According to a source, an immediate announcement of the Tamil Nadu investment by the company is unlikely. Discussions took place with the Prime Minister. “It’s too early to say anything,” said a source. Interestingly, Tamil Nadu is the group’s strong base in India, and it also entered India with investments in the state, way back in 2006. The group currently has around 15 subsidiaries in India.

The group’s latest investment plans were floated after Chairman Yong Liu’s visit in March. This is his second visit to India in a year. Then, Foxconn announced two major investments worth Rs 8,000 crore in Karnataka and $500 million in Telangana. Fii’s announcement last week complemented previously announced investments.

Before that in late 2022, Foxconn announced that it would put $500 million into its India unit to expand production. This was following Apple’s strategy to diversify its production base and make 25 percent of its devices in India by 2025 and shift 5 percent of global production from iPhone 14 to the country by the end of 2022. Foxconn’s most prominent manufacturing partner is Apple.

As part of this $500 million expansion, the Taiwanese major has already acquired 20 acres of land and is building a hostel for workers near its facility in Sriperumbudur in Tamil Nadu. Foxconn plans to increase its staff in the Sriperumbudur unit from 15,000 to around 18,000 in the near future.

Interestingly, early this month, the company announced its withdrawal from a massive $19.5 billion semiconductor joint venture with Vedanta. In 2022, the two players signed a deal to come up with semiconductors and offer production plants in Gujarat. Well, this isn’t the first time the company has backtracked on its big investment plans in India. In 2015, it announced a $5 billion investment in Maharashtra.

“India is also a fast-growing region. As the domestic smartphone adoption rate remains low; as local telecom operators continue to increase network coverage outside Tier 1 and Tier 2 cities, the region will attract major smartphone manufacturers to actively invest. It is one of the major driving forces to provide growth for global smartphone shipments in the future,” Foxconn said in its annual report last year.

Foxconn first entered the Indian market in April 2006 as a manufacturer for Nokia at its Chennai facility. At that time, its subsidiary FIH Mobile had set up three facilities – two in Sriperumbudur and one in Sunguvarchatram. Although after Microsoft’s acquisition of Nokia in 2014, Foxconn announced the termination of operations in Chennai in December 2014, it later made a strong comeback as a manufacturer for Apple.