Taiwanese tech manufacturer to the stars Hon Hai Technology Group, aka Foxconn, has announced it’s formed a joint venture to build semiconductors in India under the nation’s electronics manufacturing subsidy scheme.
A brief announcement today reveals the JV between Foxconn and Vedanta, an India company that operates mines and has diversified into operating power generation assets.
Details of just what the two companies will do are scanty: Foxconn’s announcement states it will be the minority shareholder in the venture, which “will manufacture semiconductors in India.”
No sum of money has been attached to the venture, nor has any info been offered about what sort of semiconductors will be manufactured, the numbers to be produced, nor an expected date for manufacturing commence. Foxconn and Vedanta are in talks with an undisclosed number of Indian state governments about a location for the plant.
But Foxconn has revealed that the project was the first to be established under India’s Electronics Manufacturing & Production Linked Incentive Scheme, a program that offers subsidies to defray the cost of building chip plants within the nation’s borders.
The scheme encourages manufacturers to think small: subsidies rise if manufacturers invest in smaller production nodes, so there’s more cash on offer for a 28nm factory than a 40nm facility.
Foxconn’s announcement asserts its new plant will provide “significant boost to domestic manufacturing of electronics in India.” No metric of significance was offered so The Register cannot guess at what percentage of local demand the plant will meet.
The symbolic value of the announcement is easier to assess, because India’s Aatmanirbhar Bharat self-sufficiency drive calls for the nation to attract foreign investment from top-tier players in order to satisfy local demand and create export industries. Foxconn’s world-spanning operations certainly mean this new plant has a chance of creating exports, while landing the world’s largest tech manufacturer – Foxconn holds that crown – demonstrates that India’s investment attraction policy is achieving its goals.
But India will need plenty more announcements of this sort before it gets anywhere near meeting local demand, never mind becoming a global semiconductor player. And the scheme’s funding is not on a scale that suggests India will challenge other nations any time soon: subsidies on offer total $10bn for the scheme, less than €11bn the European Union has thrown at its chip industry stimulus, the $20bn Intel is spending in Ohio or the $17bn Samsung will spend on a new fab in Texas. ®
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