International income of Foxconn, the planet’s largest contract producer of digital devices: USD 198 billion in 2023. Odds are mighty excessive that the newest six-figure iPhone or very quickly even the Google Pixel that amps up your swag quotient may owe its existence to a Foxconn shopfloor. And but, the story started slightly modestly in India, 18 years in the past. However these days, as India climbs the affordability and magnificence quotient ladder, the Taiwanese main is pumping in billions to broaden its manufacturing footprint within the nation. Enlargement of present services and product portfolio, institution of latest greenfield services and alliances with different Indian conglomerates that enable entry into dawn sectors – diversification and dominance occur to be Foxconn’s pronounced leitmotif in India’s gadget manufacturing.
In 2006, Foxconn began operations in Chennai to make merchandise for Nokia, then the chief in handsets in a rustic on the cusp of an information revolution. For a decade, its presence was slightly sedate. A turning level got here in 2017 when the corporate started manufacturing iPhones in Sriperumbudur, a particular financial zone (SEZ) outdoors Chennai. Since then, it has been instrumental within the India electronics manufacturing increase — buoyed by insatiable demand from Apple.
China plus one
As Apple appears to be like to diversify away from China, India has been an enormous beneficiary. Foxconn has immensely stepped up its investments in cellular meeting in India and that is anticipated to get solely extra intensified as Apple sharpens its India focus.
However Foxconn’s growth will not be restricted to only smartphone meeting. The corporate additionally has an enormous manufacturing facility developing in Bengaluru and has a spanking new unit close to Hyderabad that’s anticipated to begin producing AirPods shortly. The corporate’s semiconductor aspirations too appear to be taking off with its announcement to speculate USD 37.2 million and becoming a member of arms with IT main HCL to determine a chip packaging and testing facility in India. The announcement got here after its three way partnership with the Vedanta Group fell by.
All of this alerts the corporate’s imaginative and prescient to maneuver up the worth chain and transcend smartphones. This was one thing that chairman Younger Liu reiterated on his go to to India in August when he stated Foxconn was trying to make merchandise for sectors like info and communication expertise (ICT), electrical automobiles (EV), vitality and digital well being in its subsequent part of development.
“We wish to transfer up on the worth chain as a lot as we will in India. That’s what we will probably be doing within the ICT sector,” he stated on the sidelines of the inauguration of the corporate’s large industrial housing mission in Sriperumbudur. “For sectors apart from ICT, we expect EVs and vitality and likewise the digital well being trade, like wearables for private use, house use sort of medical gadgets.”
Dhruv Shekhar, a senior affiliate at Koan Advisory Group, stated that the corporate’s diversification technique is encapsulated in its 3+3 development mannequin which focuses on three industries: EVs, digital well being and robotics — and three key applied sciences: Synthetic intelligence, semiconductors and subsequent era communication. He stated the technique highlights Foxconn’s ambition to transition from a standard electronics manufacturing large to a complete expertise options supplier.
“Foxconn’s world mannequin is centred on massive – scale contract manufacturing , leveraging economies of scale and sustaining an environment friendly, built-in provide chain. Nevertheless, it has developed its technique in recent times to diversify its portfolio and scale back its reliance on conventional contract manufacturing,” he defined.
One for the street
Within the case of vitality, Foxconn is trying to goal batteries, which will probably be associated to its bigger EV technique, and is organising a battery vitality storage system (BESS) plant in Tamil Nadu, which might be its second globally. Final month, ET had reported that the corporate is assessing land close to Manallur in Tiruvallur district, about 50 km north of Chennai.
Liu stated the iPhone contract producer’s enterprise in India has grown to over USD 10 billion, and that Foxconn had invested USD 1.4 billion in India until August this yr. Apparently, after iPhones, it isn’t simply BESS but additionally merchandise like iPads and AI servers that the corporate is concentrating on.
And now, Foxconn is being wooed by a number of states to arrange a ‘Foxconn Metropolis’ , akin to their massive institutions in Zhengzhou in China. Liu already spoke of how Foxconn is trying to arrange townships in Tamil Nadu, replicating its mannequin in international locations like Taiwan and China.
And different states don’t wish to be left behind. Telangana has provided the corporate 2,000 acres to construct a ‘Foxconn metropolis’ there, whereas sources stated that Andhra Pradesh had provided it 2,500 acres to construct an industrial park and Karnataka provided it 300 acres for a provider park.
One other big-ticket funding that got here by this yr was Foxconn-subsidiary Yuzhan Know-how pumping in `13,180 crore for a unit in Tamil Nadu. This would be the first such unit within the nation that may assemble smartphone show modules, primarily for Apple. Queries despatched to Foxconn looking for remark remained unanswered.
Strategic beachhead
“India is a vital a part of Foxconn’s broader world technique, appearing as a strategic hub for diversification, resilience, and a extra sturdy provide chain,” stated Sana Hashmi, post-doctoral fellow on the Taiwan-Asia Alternate Basis. “This technique helps scale back Foxconn’s dependency on China, whereas supporting Apple’s push to fabricate extra merchandise in India. Foxconn’s plans align carefully with India’s ‘Make in India’ initiative, which promotes overseas funding and home manufacturing by incentives, infrastructure improvement, and tax breaks.”
Nevertheless, Hashmi warned that Apple could now improve investments within the US, pushed by authorities incentives and Trump-era insurance policies, particularly ‘America First’.
“President Trump’s victory and his tariff insurance policies have launched vital uncertainty into world manufacturing methods,” Shekhar stated. “Liu has emphasised that the corporate will finalise its US technique solely after January 20, as soon as Trump assumes workplace and his tariff insurance policies turn out to be clearer. On this context, Foxconn’s current USD 33-million funding by a subsidiary to accumulate land and manufacturing facility buildings in Harris County, Texas, displays its proactive strategy.”
However some, like Hashmi, consider that the corporate would wish to steadiness their American operations by additionally sustaining a worldwide manufacturing footprint to protect value effectivity, and therefore, India can be an necessary a part of this technique. “Foxconn, pushed by Apple, could improve its manufacturing in India subsequent yr,” stated Lori Chang, senior analyst at Taiwan-based Isaiah Analysis. “The first focus of manufacturing in India subsequent yr will probably be on iPhones. We count on the proportion of iPhones produced in India to rise from this yr’s goal of 12-16% to 23-27% subsequent yr.”
Chang added that the proportion of AirPods produced in India by Foxconn can also be anticipated to see a major improve subsequent yr. Total, she stated that Foxconn will try to regain its share of Apple’s provide chain in 2025 and align with Apple’s expectations, with a serious collaborative effort centred on growing the proportion of manufacturing in India.
Counterpoint analysis vp Neil Shah additionally believed that as Apple grows its footprint with a China+1 technique, Apple’s key companions equivalent to Foxconn and Tata will profit which can give them prompt scale to broaden into different product classes and likewise be a profitable a part of PLI scheme and avail the advantages.
“India is changing into an necessary a part of Foxconn’s technique past China, Taiwan and Vietnam because the market is on the cusp of development and authorities insurance policies encouraging incentivised native manufacturing gives decrease barrier alternatives to broaden and develop,” Shah stated. “Foxconn’s new technique which it unveiled just a few years in the past, follows the BOL mannequin (construct, function and localise) to broaden and be nearer to its clients or the place its buyer desires to construct.”
Velocity bumps
Foxconn’s rise has not been with out controversies. In December 2021, a meals poisoning incident befell at its facility in Tamil Nadu which led to the manufacturing facility being placed on probation by Apple and shuttered briefly. This yr, the corporate discovered itself combating allegations of discrimination in its hiring practices when reviews surfaced that it doesn’t rent married girls.
Nevertheless, Liu debunked these allegations and stated that Foxconn employed no matter gender. “Ladies do make up an enormous a part of our workforce right here. I’d emphasise that married girls significantly contribute to the efforts of what we’re doing right here,” he stated.
However there are different considerations surrounding the wellbeing of the staff too — a majority of whom are girls. “I’m involved in regards to the reproductive well being of younger girls,” Dr Jenny Chan, co-author of the e book Dying for an iPhone, informed ET. “The impact of aluminium mud and different poisonous supplies shouldn’t be underestimated on pregnant girls. Particularly in India, the place the proportion of girls is extra, it will be significant that Foxconn ought to present girls with maternity depart, sufficient time to relaxation and recuperate as a result of not getting sufficient sleep will be actually dangerous to the physique and well being.”
She added that nutritious meals for staff must also be a should. As well as, having hygienic and welcoming residing areas was essential. Moreover, offering staff with a great total manufacturing schedule and entry to counsellors and psychological well being practitioners can also be necessary.
“Well being will not be an remoted subject,” Chan defined. “What I’ve noticed in Foxconn’s services is that despite the fact that there are a number of individuals sharing a room, they hardly have time to work together or get to know one another, as a result of the shifts are completely different and after work, they’re too drained. Friendship and social help is equally necessary to total well being.”
The street forward
Hashmi stated that Foxconn’s success in India would rely upon a nicely rounded technique that focuses on native manufacturing, workforce improvement, sustainability and neighborhood ties. “By strengthening provide chains, investing in workforce schooling, and fostering native partnerships, Foxconn can turn out to be a key driver of India’s financial development, social progress, and technological improvement, enhancing its position in world manufacturing and innovation,” she stated.
Shah additionally stated that as Foxconn units up manufacturing ecosystem at scale, initiatives equivalent to cleaner, safer work and social-centric housing environments will probably be essential. “From constructing good schooling to medical services for the staff who’ve migrated to work at Foxconn will probably be of paramount significance. Additional, having efficient and impactful ESG insurance policies will even be necessary for Foxconn to construct robust mindshare and market share in India,” he stated.
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