Apple’s major iPhone assembling partner, Foxconn has signed a memorandum of understanding (MoU) with Indian group Vedanta to manufacture semiconductors in India. The new deal will diversify Foxconn’s business profile as a chip manufacturer for electric vehicles and other industries, as well.
Foxconn already operates a manufacturing unit in Chennai, southern India to assemble iPhone SE (2nd generation), iPhone 12, and iPhone 13 models for Apple. However, the Taiwan-based electronics manufacturer recently faced a lot of backlash for not providing proper housing and food to workers at the facility and was put on temporary probation by Apple. The plant reopened on January 12 after implementing corrective measures.
Foxconn new deal could boost electronic manufacturing in India, an emerging market for Apple products
As per a Reuters report, Foxconn said that the new $118.7 million deal will facilitate the growth of domestic manufacturing in India as envisioned by the country’s Prime Minister Narendra Modi. The manufacturer’s statement said:
It had signed a memorandum of understanding with oil-to-metals group Vedanta to make semiconductors, calling it “a significant boost to domestic manufacturing of electronics in India.
Foxconn said it would invest $118.7 million to set up a joint venture company with Vedanta, which would be the majority shareholder of the new venture. Foxconn would hold 40% of the venture’s shares.
“This first-of-its-kind joint venture between the two companies will support Indian Prime Minister Narendra Modi’s vision to create an ecosystem for semiconductor manufacturing in India.”
As local manufacturing is likely to benefit the economy, India will become another major market for Apple products. In Q4, 2021, Apple saw strong iPhone sales in India with earnings exceeding its competitors like Samsung and Xiaomi. Furthermore, Apple also saw a 34% Y-o-Y growth in iPhone sales.
Apple was one of the fastest growing brands in 2021 with 108% YoY growth in shipments. It maintained its lead in the premium segment, with a 44% share. Aggressive offers during the festive season, strong demand for the iPhone 12 and iPhone 13 and increased ‘Make in India’ capabilities drove high growth. We expect strong momentum for Apple in 2022 as well with increased manufacturing and retail footprint.
Foxconn is also a contender to manufacture Apple’s first passenger electric vehicle at its Lordstown Motors Corp’s auto plant in Ohio, U.S.
