Foxconn, also known as Hon Hai Technology Group, is planning a multi-billion dollar investment to expand its operations in India, according to CEO Young Liu. The move is part of the company’s strategy to diversify its bases of operation and decrease its reliance on China.
Liu announced during an earnings call that Foxconn will focus on expanding in the Indian states of Karnataka, Telangana State, Andhra Pradesh, and Tamil Nadu. The company’s main operations in India are currently centered around ICT assembly business, but it aims to increase its competitiveness in the country by expanding its capacity in key components, such as consumer electronics.
In addition to consumer electronics, Foxconn is also planning to establish a semiconductor and electric vehicle (EV) plant in India. The company intends to ship EV components from India starting next year. Foxconn already operates in India across nine sprawling campuses, which cover an area equivalent to about 500 football fields. It also runs 20 dormitories for its tens of thousands of employees.
Despite already having a significant presence in the country, Foxconn’s $10 billion annual turnover in India accounts for less than five percent of its $216 billion worldwide revenue in 2022. Recognizing the potential of India’s market size, Liu believes that several billion dollars in investment is just the beginning.
In addition to India, Foxconn has identified Southeast Asian countries as prime choices for its future global development. Liu mentioned Thailand, Vietnam, and Indonesia as key expansion targets. Foxconn has already signed factory leases in Vietnam in February 2023. The battery market in India and Indonesia is also seen as a potential area for expansion alongside Foxconn’s existing facility in Wisconsin, USA.
Currently, approximately 75 percent of Foxconn’s operations take place in China. However, the company has been actively seeking to diversify its manufacturing footprint, citing concerns over geopolitical tensions. Despite challenges, such as backing out of a joint venture with Indian mining and power generation company Vedanta, Foxconn remains committed to expanding its presence in India.
While Foxconn’s revenue for the second quarter of FY2023 decreased by 14 percent year-on-year, the company maintains a positive outlook for components and other products. However, it downgraded its outlook for full-year revenue, citing macroeconomic factors such as global monetary tightening, geopolitical tensions, and inflation.
Overall, Foxconn’s strategic move to expand into India aligns with its goal of diversifying its operations and reducing reliance on China. With its plans for multi-billion dollar investments and focus on key components, the company aims to tap into India’s potential market and further strengthen its presence in the country. The expansion into India also reflects Foxconn’s broader strategy of geographic diversification to navigate changing geopolitical climates.
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