Foxconn to invest $1 billion in Tamil Nadu for new display module plant
- In Reports
- 06:04 PM, Sep 25, 2024
- Myind Staff
One of the largest electronics manufacturing companies in the world, Foxconn, has announced plans to invest $1 billion in establishing a new plant in Tamil Nadu. According to The Economic Times, this will be the company's first plant in India where it will assemble display modules for smartphones, primarily for Apple iPhones. Other manufacturers like Pegatron and Tata Electronics are also likely to generate profits as these businesses might have access to the components produced at the plant.
It is reported that Foxconn has acquired 5,00,000 square feet of space at an Oragadam industrial park, which is close to Chennai. This new location allows for more efficient operations and possibly quicker production cycles because it is close to the company's current smartphone assembly plant. Tarun Pathak, research director at Counterpoint, estimates that local display module assembly could enhance the overall Indian production process by 2-3%, on top of the 5% value that phone assembly currently contributes. “This is a strategic move that could help India climb higher in the global electronics manufacturing ladder,” Pathak remarked.
Foxconn may have larger plans to assemble other tech products in India, such as the increasingly popular Google Pixel phones, in addition to its new display plant. Over the past few years, Foxconn has been rapidly growing its business in India, concentrating primarily on smartphone assembly. The company's bigger plan to diversify its operations includes the new display module unit. In addition to smartphones, Foxconn has expressed interest in diversifying into the semiconductor, battery, and electric vehicle (EV) industries.
The majority of India's smartphone display modules are currently imported from South Korea and China. Foxconn could contribute to lowering these imports and phone manufacturers' component costs by establishing local production. According to the report, this action could also assist brands in cutting delivery times by minimising delays in the supply chain. Companies like Samsung Display, BOE Technology, and LG Display are among the leading players in the global display module market. Chinese companies, like TCL CSOT and TXD (India) Technology, are the market leaders in local assembly in India.
Obtaining components for the display modules will be one of Foxconn's biggest challenges. Reducing this reliance on imports from China will take time, as a significant portion of these components are currently imported. Acquiring the necessary expertise to oversee the manufacturing of cutting-edge display technologies presents another challenge for it.
Foxconn's increased investment in India is in line with Apple's plan to become less dependent on China. India has become an important component of Apple's plan to diversify its production base as supply chain disruptions and geopolitical tensions increase. This new display module facility will help Apple further solidify its presence in India, where it currently manufactures a portion of its iPhone models through partnerships with Foxconn and other suppliers.
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