Foxconn, a major manufacturer for Apple, has been granted approval by India’s cabinet to construct a new 37 billion Indian rupees ($435 million) semiconductor facility in collaboration with HCL Group, one of the country’s top IT companies. This development marks yet another effort by Apple to lessen its dependence on China and expand its production of components in India.
During a press conference in New Delhi on Wednesday (05/14/2025), India’s IT minister Ashwini Vaishnaw announced that a new plant will be established near the Jewar airport in Uttar Pradesh, with plans to start operations by 2027. The facility will specialize in manufacturing display driver chips for various devices such as mobile phones, laptops, automobiles, and PCs. These chips play an integral role in controlling and enhancing the display of images, text, and videos on screens.
According to a senior official from TechCrunch, the new plant in India will not immediately handle chip fabrication due to the country’s lack of advanced facilities. Instead, it will initially serve as a semiconductor assembly and test (OSAT) facility, providing packaging and testing services for chips that are manufactured outside of India.
According to Vaishnaq, India’s development of fabs for creating chips has the potential to be a significant step forward. Specifically, this new facility is expected to test display panel chips that could potentially power Apple devices.
“Once this unit is there, the display panel [manufacturing] will also come to India,” Vaishnaw said, adding that it “will have a capacity of 20,000 wafers per month and can produce 36 million units monthly.”
The recent deal announced by Apple marks another move towards expanding production beyond China and strengthening connections with India. This announcement comes shortly after CEO Tim Cook revealed plans to mitigate trade uncertainties between the U.S. and China by increasing manufacturing and assembly in India.
At that time, Cook hinted that strengthening relations with India would prevent Apple from having to raise prices on its devices in response to tariffs. However, there are reports that the company is still considering potential price increases.
Apple has made significant investments in India, ramping up its local assembly of iPhones for export to various markets. In addition to this, the company aims to expand its manufacturing presence in India by producing other devices such as AirPods.
The minister refrained from disclosing the specific details of the incentives that the Indian government plans to provide Foxconn for their joint venture. As part of the state-run semiconductor scheme, companies can receive fiscal support of up to 50% of their capital expenditure when establishing facilities.
Last year’s January, Foxconn’s sub-company Hon Hai Technology India Mega Development revealed its intention to put in $37.2 million for a 40% share of the partnership with HCL.
The most recent approval, which was granted eight months after the initial decision, is for a semiconductor plant to be established in Sanand, Gujarat. The initiative, proposed by Kaynes Semicon – a subdivision of Kaynes Technology in Bengaluru – involves an investment of 33 billion Indian rupees ($386 million).
In February of last year, the Indian government gave the green light to allot a maximum of 1.26 trillion Indian rupees ($15 billion) towards constructing the initial three semiconductor plants as part of its previously revealed $10 billion initiative. The selection includes the country’s inaugural semiconductor manufacturing plant.
The sector is eagerly awaiting updates regarding the Indian government’s semiconductor incentive program’s next phase. However, Vaishnaw did not disclose any specifics during the press conference held on Wednesday (05/14/2025).
