HCL Group, Foxconn partner for chip testing plant in India

Apple supplier Foxconn and HCL Group have announced that the two firms will partner to establish a semiconductor assembly and testing facility in India. The companies will set up an outsourced assembly and testing (OSAT) unit in the country.

An OSAT plant packages, assembles and tests foundry-made silicon wafers and then turns them into finished semiconductor chips.

Citing a regulatory filing, news agency Reuters reported that Foxconn's India unit will own a 40% stake in the joint venture with a $37.2 million investment.

"Through this investment, the partners aim to build an ecosystem and foster supply chain resilience for the domestic industry," Foxconn said in a statement, adding that it was looking forward to “jointly setting up OSAT operations in India with HCL.”

Foxconn reportedly raised its proposed investment from $29.4 million following talks with HCL.

"Final terms, including transaction amount, asset details and conditions, will depend on further negotiation. By regulation, formal announcements will be published when a definitive agreement is reached," the company said.

HCL said the partnership was “an opportunity that provides strategic adjacency to the group portfolio.” HCL, however, didn't disclose financial details from its side. The companies did not delve into any information on the location of the proposed project.

Foxconn's other India plans
Taiwan-based Foxconn has been working to diversify its production capacity in a bid to lower its reliance on China following COVID-19 disruptions and geopolitical tensions. The company is looking to set up a semiconductor fabrication plant in India to start local chip manufacturing.

Last month, a report said that Foxconn will invest an additional $1.67 billion to establish the upcoming plant in Karnataka. Foxconn assembles around 70% of iPhones and it is the world's largest contract manufacturer. In August, the company announced an investment of $600 million in two projects in Karnataka.