Foxconn to make more components locally to ramp up India presence

Foxconn, which assembles iPhones for Apple, is also considering assembling and manufacturing more components for other companies, including Google’s Pixel smartphones, the people previously quoted, who spoke on condition of anonymity, said.

“While initial investments in the current tranche will go towards expanding assembly lines, Foxconn in India aims to expand its presence in the country’s electronics sector beyond servicing the assembly of Apple’s iPhones,” said one of the three people quoted earlier.

“This includes new product categories as well as assembly lines from other manufacturers,” the person said. “The company will also invest in new component manufacturing and localize more going forward, as it has already done a significant amount of backward integration in India.”

It became clear on Monday in response to a survey by a Foxconn spokesperson. Mint It was stated that the contract manufacturer’s investment of 1.5 billion dollars in the country was announced in May.

The company did not comment on its component investments in India.

“We have already seen Foxconn start assembling Pixel phones for Google through a dedicated subsidiary in India last year. Now it will cater to more,” said the first person quoted earlier.

The company is currently trying to accelerate the localization of components such as device molds and cases to increase added value from local manufacturing operations, two of the people cited above said. This will also help Foxconn expand its margins, the second consultant said.

Foxconn has invested $11.5 billion in the country in the last decade. The company first announced in 2015 that it would invest $5 billion. Last August, company chairman Young Liu said its investment in India had exceeded $10 billion.

Its subsidiary, Bharat FIH Ltd, currently assembles two-thirds of the nearly 25 million iPhones in India and plans to double local production in light of current tariffs.

Ashok Chandak, President of the Indian Electronics and Semiconductor Association (IESA), said: “This kind of margin expansion is vital because pure assembly business is a very low margin – which is not the most sustainable in the long run.” “Moreover, with the Center’s focus on ECMS, Foxconn stands to gain from accelerating the localization of components – and already has a strong, established base in the global component supply chain to attract foreigners.” Raw material sub-sellers will come to India.”

Component push

Foxconn is not alone. Tata Electronics, which produces one-third of iPhones produced for Apple in India, is also increasing local component production. It was reported on Tuesday that it has acquired the Indian manufacturing division of Chinese supplier Justech Precision to increase local value addition. The company is also setting up India’s first modernized commercial semiconductor manufacturing facility and a chip packaging facility to become a fully backward integrated manufacturer.

Others, like VVDN Technologies, are taking the same approach, albeit beyond smartphones.

“This move reflects a larger play by Foxconn in line with the direction taken by the central government,” said Tarun Pathak, co-founder and partner at technology research firm Counterpoint. “Foxconn has established itself as a large-scale electronics assembler in India over the last decade and has stepped up component localization through joint ventures and subsidiaries. It is now likely to pursue the third phase of its India operations as it looks for more local components in line with the current government’s initiatives.”