The exit from China is organized for the tech giants. The Taiwanese group Foxconn, by its official name Hon Hai Precision Industry, is seeking to set up part of its production in India. He acknowledged on Saturday that its CEO, Young Liu, had indeed visited the country from February 27 to March 4, following the media revealed this visit for new investments. The world’s largest electronics maker and Apple’s main iPhone supplier, Foxconn said no “final agreement” has not been concluded to date.
“My visit this week supports Foxconn’s efforts to deepen its partnerships (…) and seek collaboration in new areas such as semiconductor and electric vehicle development,” Young Liu explained in the statement. He also met Indian Prime Minister Narendra Modi, who tweeted on Wednesday regarding talks aimed at “developing India’s tech and innovation ecosystem”as reported by AFP.
Figures to be confirmed
The Taiwanese giant specified in its press release that it “did not engage in any definitive new investment commitments or agreements during this visit”adding that “the amounts of financial investments mentioned in the media are not information published by Foxconn”. According to Bloomberg News, citing unnamed sources, Foxconn plans to invest $700 million to open a new manufacturing facility.
This excitement began on Friday following statements by Indian officials on social networks. The Chief Minister of the Indian state of Karnataka (southwest), Basavaraj S. Bommai, thus published a tweet according to which Apple must ” Soon “ produce iPhones in a new factory in this state, creating “regarding 100,000 jobs”. The office of the chief minister of neighboring Telangana state, Chandrashekar Rao, also tweeted that Young Liu had signed an agreement on Thursday for “electronics manufacturing facilities”.
India set to become unavoidable
Foxconn is already established in India where it has been manufacturing iPhones in India since 2019 at its factory in the state of Tamil Nadu. This is also the case for two other Taiwanese suppliers to Apple, Wistron and Pegatron. However, the country weighs less than 5% of Apple’s global production, according to Bloomberg, behind the United States, China, Japan and five other countries.
This share might increase in the coming years. Apple like Foxconn seek to diversify geographically. They are now very dependent on China, where a large part of their activities are located. But the Covid crisis has led several groups to reconsider their establishment in the country, where the drastic health measures of the policy of “zero Covid” and diplomatic tensions with the United States disrupted production.
In fact, Southeast Asia and increasingly India, which offers skilled labor at low cost and represents a huge potential market, appear as alternatives to China. The movement is still taking place in small steps, but is clearly underway with at least strategic thinking. Apple has already declared in September 2022 that it will produce its latest iPhone 14 in India.
As AFP reminds us, Apple’s expansion in India is also consistent with the policy of the « Make in India » of Prime Minister Modi, under which he calls on foreign companies to have their products manufactured in his country.
