Foxconn and HCL Team up For Local Semicon Assembly By CIOTechOutlook Team

Foxconn and HCL Team up For Local Semicon Assembly

CIOTechOutlook Team | Thursday, 18 January 2024, 02:38 IST

Foxconn has struck a collaboration with HCL Group for semiconductor assembly and testing, marking the Taiwanese company's second attempt to enter the chip-making market in India.

They will set up an outsourced assembly and testing (OSAT) unit, the two said in separate statements on Wednesday. A total of $100-150 million investment is expected, said government officials in the know, as per economic times.

Foxconn's portion in the joint venture will be $37.2 million for a 40% ownership, according to a filing by Foxconn Hon Hai Technology India Mega Development, a subsidiary of Hon Hai Technologies (Foxconn). It also informed the Taiwan and London stock exchanges that the transaction was "a non-binding MoU (memorandum of understanding)."

An OSAT unit offers third-party chip packaging and testing to semiconductor production plants. Both fabless and fab businesses outsource these services to such divisions to save money.

HCL described the cooperation as "an opportunity that provides strategic adjacency to the group's portfolio."

Foxconn, one of Apple's contract manufacturers, stated that it looks forward to "jointly setting up OSAT operations in India with HCL."

HCL was about to file a formal application to set up an OSAT unit.

Foxconn's initial foray into the Indian semiconductor industry, a joint venture with the Anil Agarwal-led Vedanta Group, terminated last year. In February 2022, the Taiwanese company announced a collaboration to produce semiconductors and display panels in India, with a total potential investment of $19.5 billion.

It was one of the first projects to launch under the crucial India Semiconductor Mission, with national and state subsidies covering around 70-75% of the project's capital investment.