Taiwanese manufacturer Foxconn (2317. TW) will invest $600 million in two projects in India’s Karnataka to make casing components for iPhones and chip-making equipment, signaling a growing interest in the South Asian nation as it spreads bets beyond China. Some $350 million will go towards setting up an iPhone component facility, expected to generate 12,000 jobs. It will operate as a supplementary unit to the company’s existing “end assembly” plant in the Devanahalli Information Technology Industrial Region near the district capital town of Tumakuru. The second project will be a $250 million collaboration with Applied Materials (AMAT.O), a leading semiconductor equipment maker.
The Karnataka government has pledged full support and a conducive business environment for the projects, said Foxconn Chairman Young Liu and the state’s Industries Minister MB Patil. The company is evaluating land parcels in and around Bengaluru, they said.
Foxconn is one of the world’s largest contract manufacturers of electronic products, best known for assembling and finishing Apple’s iPhones. The company employs about 1.2 million people globally.
Over the years, Foxconn has been dogged by worker unrest and safety concerns, but the firm says it is taking steps to improve conditions in its plants. It has introduced better health and safety measures, expanded staff cafeterias to cater to different tastes, and improved living conditions by giving workers more time off. It also stepped up efforts to recruit more women and minorities.
The latest investment plans come after several meetings between the two parties, including a visit by Liu to India in early August. During that trip, Liu discussed Foxconn’s ambitions in India with Patil and the state’s IT and Industries ministers.
In a separate development, Foxconn is considering expanding its plant in the Indian city of Pune. According to local reports, the expansion would increase the production capacity of iPhones and other mobile devices. The new facility would have a capacity of up to 20 million units per year.
Several other tech companies are building new factories in India, including Micron (MU.O) and AMD (AMD.O). They have been attracted by the country’s large and skilled workforce and its lower manufacturing costs. These factors have fueled speculation that the Indian economy is maturing and becoming a viable place for foreign companies to invest. The investment announcements by Foxconn and the other multinationals highlight that point. As a result, the industry is likely to attract more companies in the future. That bodes well for the growth of India as a global player in the technology sector.
