Taiwan-based manufacturing giant Hon Hai Precision Industry Co. is planning a joint venture in India to produce semiconductors, its latest move to diversify its business beyond electronics contract manufacturing.
In a statement Monday, Hon Hai said it has signed a memorandum of understanding (MOU) with Indian conglomerate Vedanta Group to open a joint venture in response to Indian Prime Minister Narendra Modi’s vision of creating a semiconductor production ecosystem in India.
Under the MOU, Vedanta is expected to hold the majority stake in the joint venture, and Vedanta Chairman Anil Agarwal would be the new company’s chairperson, the statement said.
In a separate filing with the Taiwan Stock Exchange, Hon Hai, known internationally as Foxconn, said it intended to take a 40 percent stake in the joint venture with an investment of about US$119 million, while Vedanta will take the other 60 percent.
The company said the plan is aimed at supplying semiconductors in India and giving a boost to the country’s production of electronic goods.
The two partners are currently in discussions with authorities in several states in India to determine where the joint venture will be located.
According to Hon Hai, Vedanta has a diversified investment portfolio, including investments in electronics and technology businesses through group companies Avanstrate Inc. and Sterlite Technologies.
Hon Hai has intensified efforts in recent years to broaden its business through a “3 plus 3” initiative focused on electronic vehicles, robotics and digital health care based on advanced technologies including semiconductors.
The company has its own 8-inch wafer fab, and it acquired a 6-inch wafer fab from Macronix International Co. in August 2021 that is scheduled to start production in the first half of 2022.
Hon Hai also signed an MOU last year with Taiwan’s Yageo Corp., the world’s third-largest multi-layer ceramic capacitor (MLCC) supplier, to set up a joint venture in Hsinchu to manufacture smaller semiconductors such as analogy ICs, which cost less than US$2 per unit.
The joint venture will add to the company’s presence in India, which already includes a production base in Chennai to assemble the iPhone XR and iPhone 11.
Hon Hai unit FIH Mobile Ltd. also has subsidiary Bharat FIH Ltd., which is the largest contract electronics maker in India with three facilities in southern India making cellphones, machinery, electric vehicles, TVs, handheld devices and internet connectivity gadgets.
Source: Focus Taiwan News Channel