Foxconn, the world's largest EMS provider, registered a significant turning point in its strategy by announcing a $ 1.54 billion investment in India. It shows that the company is making calculated moves to maintain a foothold and expand its reach – not alone, but also counting on Apple's participation.
The changes are driven by Foxcoon's increasing revenues and operational requirements and signify the latest chapter in its ambitious expansion narrative. Read more right below.
Foxconn's Strategic Diversification
The Taiwan-based company, renowned for manufacturing partnerships with tech giants like Apple, adopts a 'China+1' strategy, identifying India as a promising manufacturing base. Foxconn is not the only one thinking that way, as this trend to diversify operations beyond China is becoming prevalent among technology powerhouses.
Its investment in China has dwindled since 2018, ending a flourishing 15-year run from 2001-2017, a shift that aligns with the escalating trade tensions between the U.S. and China.
Anyway, despite the shift, Foxconn retains a potent presence in India, boasting three manufacturing campuses.
More About Foxconn's Indian Endeavours
Earlier this year, Foxconn exited a $ 19.5 billion chipmaking collaboration with Vedanta. Yet, the tech giant remains bullish about India's potential and continues to support the country's 'Make in India' initiatives.
In August, Foxconn unveiled plans for a $ 600 million investment aimed at chip-equipment manufacturing and iPhone component casing in Karnataka, a southern Indian state. Today, the company shows positive financial indicators.
Foxconn's Indian Revenues Today
The most recent quarter revealed a surge in Foxconn's Indian revenues, up by 53% YoY to NT$62bn. Consequently, India's contribution to the company's overall revenue increased from ~2% in 2021-22A to 3.3% in 9M23.
A report by Goldman Sachs suggests this growth mirrors the demand for diversified production bases by global clients, thereby strengthening Foxconn's EMS market position.
With its consistent support for the 'Make in India' initiative, Foxconn's commitment to India appears to remain strong and unwavering.
Also, results seem to confirm that the $ 1.54 billion investment goes way beyond a financial move, proving itself a strategic decision to tap into a high-potential market like India, and that diversification isn't just an option, but a necessity in the contemporary global tech industry.