Foxconn a Contractor of Apple Inc. Acquired 300 acres of Land in Bengaluru

Indian faction of the Taiwanese contract manufacturing firm Foxconn Hon Hai Technology India Mega Development has bought 300 acres of land at Devanahalli Taluk in Bengaluru. For a sum of Rs 300 crore the Electronics manufacturing giant, for Apple Inc., shows the intent of setting up a fabrication unit on Indian shores. A London Stock Exchange (LSE) filing on Tuesday confirmed this new development.

Foxconn is one of the biggest producers of Apple products, and this investment is expected to setup a large manufacturing plant in Bengaluru to produce Apple products, in addition to other electronics.

Ever since the pandemic, Apple has been seen steadily reducing its dependence on China and growing its presence in India. This plant in addition to other Foxconn investments in India, could reshape the global supply chain dynamics in the electronics industry.

Karnataka government said the total investment in the state would be more than $500 million and may even exceed $1 billion over a period of time. The letter of intent signed between the Karnataka government and Foxconn in March said the proposed investment would happen between 2023 and 2027, employing about 1 lakh people, directly and indirectly. Foxconn chairman Young Liu visited Bengaluru in March to meet state officials and see the proposed land. The state government had gone all out to win the contract, and had even given a name — Project Elephant — for its Foxconn proposal.

The Taiwanese giant so far has a presence in Gujarat, Karnataka, Telangana and Tamil Nadu. Counterpoint Research's director Tarun Pathak said Foxconn’s expansion in India is part of Apple’s strategy to expand its manufacturing footprint in the country.

Navkendar Singh, associate VP with research firm IDC India, said

Apple has been quite successful in the past 2-3 years in terms of iPhone volumes in India. From From 2.7 million iPhones in 2020 to about 4.8 million in 2021 and about 6.7 million in 2022, the company has witnessed steady growth. This year, they should be doing around 9 million.

Adding further,

Foxconn is an approved manufacturer in the government’s PLI scheme. The manufacturer achieved its targets for last year and claimed incentives. The PLI scheme also requires manufacturers to invest a threshold amount to claim incentives. In addition, as targets get higher in the coming years, the manufacturers must expand their capacities to achieve those targets. Currently, Foxconn is manufacturing iPhone 11, 13 and 14 in India. We believe Apple may start the Pro/Pro Max models in India soon

Quoting Counterpoint in March, that Apple’s ‘Made in India’ shipments grew 65% year on year by volume and 162% year on year by value in 2022, reflecting the extent of manufacturing capacity it has added in the country. Singh said Foxconn’s acquisition of such a big tract of land would mean they would create manufacturing capabilities both for domestic market, as well as exports.

Early this year, Foxconn had signed a JV with Vedanta to set up a semiconductor and display manufacturing facility at the Dholera Special Investment Region near Ahmedabad in Gujarat.

Telangana IT minister KT Rama Rao had also recently announced that Foxconn would be setting up an electronics manufacturing facility in the state.