In recent months, several overseas companies have pledged investments into the Indian market, particularly in the semiconductor sector. Today’s announcement follows suit, as a unit of Taiwanese company Foxconn has entered into an agreement with the government of Tamil Nadu to invest $194 million (₹1600 crore) in setting up a new plant in the southern Indian state.
In a statement on Monday, the state government said that the new facility by Foxconn Industrial Internet will focus on manufacturing electronic components, and will be located in the Kancheepuram district near the state capital of Chennai. This development was not entirely unexpected, as prior media reports had indicated that FII was in discussions with the state government regarding the investment. It comes a few weeks after Foxconn’s withdrawal from a joint venture with Vedanta, which dealt a setback to India’s semiconductor ambitions. The $19.5 billion joint venture between the two companies would have facilitated the establishment of semiconductor and display production plants in Gujarat.
TRB Rajaa, Tamil Nadu Minister for Industries, expressed his enthusiasm after meeting with Young Liu, Chairman of Foxconn, and other representatives, calling it “big news and a proud moment.” The new facility is expected to generate 6000 new jobs, fostering a skilled workforce in the state. It will be separate from Foxconn’s existing facility in Tamil Nadu, where iPhones are assembled.
“Foxconn’s repeated investments and expansion plans in Tamil Nadu are a testament to the state being the top choice for manufacturing in India for major companies across the world. This is a major achievement for the state. Manufacturers who have seen immense success in Tamil Nadu over the past many years know that by investing more in the state they will only gain more. This also illustrates the trust global investors have in the leadership of Hon’ble Chief Minister of Tamil Nadu Thiru MK Stalin avargal,” Rajaa announced in a post on LinkedIn on Monday.
“With this proposed investment, and many more to come, Tamil Nadu is poised to not only remain the top electronics exporter in the country but also significantly increase its electronics exports in the coming years. This will play a critical role in attaining our Honourable Chief Minister Thiru MK Stalin avargal’s ambition of #OneTrillionUSD economy in Tamil Nadu,” he added.
This investment in Tamil Nadu marks a significant step in Foxconn’s expansion plans in India. The company already operates a major manufacturing campus in Chennai, where it assembles Apple’s iPhones — including its latest models, and provides employment to nearly 35,000 people. With plans to set up another facility in the state while keeping it separate from the existing one, and with the aim to quadruple the workforce at the Chennai facility by 2024, Foxconn’s presence in Tamil Nadu is set to grow even further.
In addition to this, the Foxconn subsidiary has signed a research and innovation agreement with the Indian Institute of Technology (IIT) Madras and the state government’s investment arm, Guidance. Moreover, Foxconn has engaged in discussions with the southern states of Gujarat and Karnataka as part of its efforts to carve a niche in the domestic semiconductor sector. Notably, other overseas investors like AMD and Micron have also pledged significant investments to establish facilities and claim a share of the semiconductor market.