Foxconn upbeat on investment in India, lessening reliance on China

Young Liu, the Chairman of Foxconn, expressed during an earnings call that considering India’s promising market size, an initial investment of several billion dollars is just the starting point. This statement came in response to a question about the company’s rumoured $2 billion investment plan in India.

“Foxconn annual revenue was USD 200 billion. From the perspective of India’s potential market size and if we can fully implement our plans there, several billion dollars in investment is only the beginning.

Foxconn operates about nine campuses in India. Total size will be equivalent to more than 500 football fields. We have over 30 factories in India. The turnover, business size, roughly USD 10 billion annually. We have over 20 dormitories that shelter tens and thousands of employees that work with Foxconn in India.

Questions around India have been coming up during investors’ calls since the last two quarters, which indicates there is a positive energy in the country. I have said before that our CapEx this year will grow from last year. That outlook has not changed.

Since Foxconn entered India, its revenue, number of employees, and investment scale have grown exponentially.

At present, Foxconn is mainly engaged in the information and communication technology assembly business and going forward, Foxconn will actively deploy work in the area of key components to raise its competitiveness in India.

In addition to existing operations in Andhra Pradesh and Tamil Nadu, Foxconn will also deploy in Karnataka, Telangana and other states.

Through close cooperation with central and local governments, Foxconn will plan to establish industrial parks and optimize the business environment in terms of infrastructure, policies and laws.” Liu said.

In May, Foxconn made news by purchasing a considerable plot of land on the outskirts of Bengaluru, a major tech hub in India, for $37 million. In the latter part of July, Foxconn’s Chairman, Young Liu, took part in the opening keynote of the second edition of Semicon India, which was held in Gandhinagar, Gujarat. Sharing the stage with Indian Prime Minister Narendra Modi and Sanjay Mehrotra, President and CEO of Micron, as well as other industry leaders, Liu expressed, “Taiwan is and will be your most trusted and reliable partner.”

Although it operates across more than twenty countries, a significant portion of its activities are centred in China. However, the company aims to lessen this reliance and has been making headlines with reports of substantial investments in India.

In addition to its activities in India, Foxconn is strongly dedicated to implementing the Build-Operate-Lease (BOL) strategy across various Southeast Asian countries, including Vietnam, Thailand, and Indonesia. This strategic initiative is designed to reinforce the supply chains of local partners and elevate their competitiveness. Simultaneously, the company is actively involved in collaborating with its partners on a global scale, with the objective of expanding its presence in local markets and jointly accomplishing significant milestones.

Announces second quarter results
Foxconn, also known as Hon Hai Precision Industry reported on Monday a 1% drop in second-quarter net profit, as global economic woes hurt demand for smart consumer electronics.

It expects 2023 sales to fall after previously forecasting flat revenue, sounding a warning about demand for the devices it makes for Apple Inc. and other global firms.

The Taiwanese company now expects most of its main business segments, including smartphones, to contract “slightly” this quarter and over the entire year, as global economic malaise depresses consumer spending on electronics. It reported a larger-than-expected 30% slide in operating income to NT$30.9 billion ($968 million) for the June quarter.

Hon Hai’s results underscore a worsening market for global electronics, as consumers and corporations hold off on spending during a downturn. From Apple to Qualcomm Inc. and Taiwan Semiconductor Manufacturing Co., the industry’s bellwethers have warned that a downturn that set in after the pandemic may last longer than anticipated.

Apple, Hon Hai’s top customer, in August telegraphed its longest sales slump in decades, the result of crumbling demand for phones, computers and tablets worldwide. China, the world’s biggest market for those devices, is mired in an economic funk that some economists say may worsen over time.

CT Bureau