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HCL-Foxconn JV advances semiconductor unit talks with Tamil Nadu, Telangana

In the evolving landscape of India’s semiconductor industry, a new partnership takes center stage. The HCL Group and Foxconn Group are making strategic strides, currently embroiled in discussions with the states of Tamil Nadu and Telangana. The objective? The establishment of a new semiconductor assembly and testing unit, an Outsourced Assembly and Testing (OSAT) facility to be precise. The joint venture’s ambitious plan follows its recent public declaration to set up such a facility.

A Tale of Two States
Initially, Karnataka was also part of the equation. However, the more enticing incentive structures presented by Tamil Nadu and Telangana have rendered them the frontrunners. A senior central government official shed light on the matter, stating that the decision on the unit’s location hinges on multiple factors. Land cost, power supply stability, and environmental clearances are among the crucial considerations.

Why Tamil Nadu May Lead the Race
Industry insiders suggest that Tamil Nadu might have an edge. With Foxconn’s significant presence in the state and the logistical advantages of placing the unit near Foxconn’s existing iPhone manufacturing facility in Sriperumbudur, Tamil Nadu seems to be the likely choice. The fresh Semiconductor and Advanced Electronics Policy, unveiled by Tamil Nadu during a recent global investors meet, offers substantial financial incentives. These benefits could cover up to 75% of a project’s investment for semiconductor ventures that align with the central government’s $10 billion chip subsidy plan.

Investments and Stakeholders
The joint venture’s OSAT facility, a key player in providing chip packaging and testing services to semiconductor producers, is projected to demand an initial investment of up to $150 million. This figure does not include potential incentives from central and state governments. Foxconn has declared a 40% stake in the joint venture, backed by a $37.2 million investment. Amid this, responses from the involved parties have been limited. Foxconn has refrained from responding to queries, and HCL has chosen to stay mum, barring their initial announcement. BNN Breaking

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