After Karnataka, Foxconn Industrial Internet in talks with Tamil Nadu

After announcing a mega Rs 8,800 crore project in Karnataka, a Taiwan-based Hon Hai Technology Group subsidiary Foxconn Industrial Internet (Fii) is planning to come up with an electronic components unit in Tamil Nadu.

Fii’s chief executive officer Brand Cheng had a meeting with Tamil Nadu Chief Minister M K Stalin and Minister for Industries, Investment Promotion and Commerce TRB Rajaa in this regard on Wednesday. This is part of a larger strategy by the group to strengthen its presence in India. In the last few months, Foxconn had announced significant investment plans in states like Karnataka, Telangana and Tamil Nadu, strengthening its presence in South India.  Early this week, FII proposed to come up with a unit in Karnataka’s Tumakuru near Bengaluru at an investment of Rs 8,800 crore.

According to a source, an immediate announcement on Tamil Nadu investments by the company is unlikely.  “Discussions happened with the chief minister. It is early to say anything,” said a source. Interestingly, Tamil Nadu is considered as a strong base of the group in India and it also forayed into India through investments in the state, way back in 2006. The group is at present having around 15 subsidiaries in India.

The group’s recent investment plans were rolled out after the visit of its chairman Young Liu in March. It was his second visit to India in a year’s time. Following this, Foxconn announced two major investments of Rs 8,000 crore in Karnataka and $500 million in Telangana. Last week’s announcement by Fii was supplementary to the earlier announced investments.

Prior to that in late 2022, Foxconn had announced that it will put $500 million in its India unit to expand production. This was following the Apple strategy to diversify its production base and making 25 per cent of its handsets in India by 2025 and shifting 5 per cent of global production of the iPhone 14 to the country by the end of 2022. Foxconn Apple's most prominent manufacturing partner.

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

Interestingly, early this month, the company had announced its withdrawal from a massive $19.5 billion semiconductor joint venture with Vedanta. It was in 2022 that both the players had signed a deal to come up with semiconductor and display production plants in Gujarat. Well this is not the first time, the company is going back on its big ticket investment plans in India. In 2015, it had announced a $5 billion investment in Maharashtra.

“India is also a fast-growing region. As the local smartphone adoption rate is still low; as local telecom companies continue to increase network coverage outside of Tier 1 and Tier 2 cities, the region will attract major smartphone manufacturers to actively invest. It is one of the main 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 in its Chennai facility. At that time its subsidiary FIH Mobile had established three facilities --  two at Sriperumbudur and one at Sunguvarchatram. Though after Microsoft’s acquisition of Nokia in 2014, Foxconn had announced winding up operations in Chennai in December 2014, it came back strongly later as an Apple manufacturer.