For several months now, Apple has been striving to reduce its dependence on China for the production of its products. A new billion-dollar investment in Indian production facilities makes it clear that the iGroup and its suppliers are serious.
• Foxconn is investing billions more in Indian production facilities
• Several Foxconn plants already under construction in South India
• Apple wants to reduce its dependence on China – India as an alternative
India represents a highly attractive market for Apple with an ever-growing middle class. Morgan Stanley analyst Erik Woodring recently took the enormous growth opportunities in India as an opportunity to increase his Apple price target from $190 to $220.
But the now most populous country in the world is also becoming increasingly important for the production of its iPhones. Apple recently multiplied the number of iPhones produced in India. Taiwanese Apple supplier Foxconn is spearheading iGroup’s efforts to outsource its production from China to India. Now a new step has been taken in this direction.
Foxconn is once again investing billions in expanding production in India
Foxconn Technology has announced its intention to invest over $1.5 billion in an Indian construction project. This significant investment will be made through a Foxconn subsidiary, Hon Hai Technology India Mega Development. Hon Hai has been registered in the Indian state of Maharashtra since 2015, according to Taiwanese security records and Indian corporate records. The purpose of the new project, according to the documents cited by CNBC, is to meet Apple’s “operational demand.” However, further details about the location and production focus of the project have not yet been announced.
At the same time, the same subsidiary is to provide an equivalent amount in Indian rupees for a construction project to meet operational needs. Foxconn, a prominent Apple supplier with significant operations in mainland China, suffered major setbacks at its factories in 2022 due to COVID-19 lockdowns that drastically slowed iPhone production – a key part of Apple’s manufacturing processes.
Foxconn already has several projects in India
The COVID-19 lockdowns and general geopolitical uncertainties surrounding the Middle Kingdom have caused Apple suppliers like Foxconn to reconsider their heavy reliance on China. Foxconn has responded by announcing various initiatives in India, including a $600 million project in the state of Karnataka and a $500 million factory in the state of Telangana. Both states are located in southern India.
The new investment comes several months after Foxconn “mutually agreed” to withdraw from a $19.5 billion joint venture to make chips in India, the company said at the time. Foxconn added that it remains “confident” about the ambitions of the Indian semiconductor industry.
More and more US companies are relying on India
The new Foxconn investment is one of a series of projects announced by the Apple supplier in recent months. Meanwhile, Apple is not the only US company investing billions in building new production facilities in India. The leading US laptop manufacturers Dell and HP are now also taking part in a subsidy program run by the Indian government. In addition to the rapidly increasing purchasing power of Indians, it is above all the comparatively stable geopolitical situation in India from which US companies expect long-term advantages.
Editorial team finanzen.net
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