Foxconn Considers Semiconductor Venture in India: Potential Partnership with TSMC and TMH, Report Says

Foxconn Considers Semiconductor Venture in India: Potential Partnership with TSMC and TMH, Report Says

Foxconn, the Taiwanese multinational electronics contract manufacturing company, is reportedly in discussions with Taiwan Semiconductor Manufacturing Co (TSMC) and Japan’s TMH Group for technology partnerships to establish semiconductor fabrication units in India. This comes after Foxconn called off its joint venture with the Vedanta Group.

The potential partnerships aim to enable Foxconn to manufacture advanced as well as legacy node chips in India. The company, known for manufacturing iPhones for Apple, is seeking to expand its presence in the semiconductor industry. TSMC, also based in Taiwan, is a leading semiconductor foundry known for its advanced chip manufacturing processes.

While the details of the partnerships are yet to be finalized, it is expected that Foxconn will soon conclude the discussions and move forward with its plans to establish semiconductor fabrication units in India. This development aligns with India’s efforts to boost domestic semiconductor manufacturing and reduce reliance on imports.

By collaborating with TSMC and TMH Group, Foxconn aims to leverage their technology expertise and establish a strong semiconductor manufacturing presence in India. This move could potentially contribute to the growth of India’s semiconductor industry and support the country’s goals of becoming a global hub for semiconductor manufacturing.

Taiwan Semiconductor Manufacturing Co (TSMC) is indeed one of the largest chip foundries globally. The company specializes in semiconductor manufacturing and is renowned for its advanced chip fabrication processes. TSMC holds a significant market share and is known for producing chips for numerous leading semiconductor companies. Its revenue in 2022 increased by 33.5% to $75.88 billion compared to the previous year. TSMC shipped 15.3 million 12-inch equivalent wafers in 2022, up from 14.2 million in 2021.

TSMC’s chips are highly sought after and widely utilized by top semiconductor companies across various industries. Its client list includes prominent names such as AMD, Apple, ARM, Broadcom, Marvell, MediaTek, and Nvidia. The company’s manufacturing capabilities, advanced processes, and quality chips have positioned it as a crucial player in the semiconductor industry.

TMH Group, on the other hand, offers semiconductor-related solutions and specializes in the operation and maintenance of manufacturing equipment. Their expertise likely complements Foxconn’s semiconductor manufacturing plans, as they can contribute to the efficient operation and maintenance of the fabrication units. Collaborating with TMH Group could assist Foxconn in optimizing its manufacturing processes and ensuring the smooth operation of its semiconductor facilities.

By exploring partnerships with TSMC and TMH Group, Foxconn aims to leverage their industry expertise and advanced technologies to establish a robust semiconductor manufacturing ecosystem in India. This strategic move aligns with India’s ambition to strengthen its semiconductor industry and reduce dependence on imports.

Foxconn’s decision to call off its chipmaking joint venture with Vedanta indicates a shift in its strategy for pursuing semiconductor production in India. Instead of continuing with the consortium, Foxconn now plans to apply for incentives under the Indian government’s semiconductor production plan independently.

The joint venture between Foxconn and Vedanta was among the five applicants vying for government incentives offered through a $10 billion package introduced in December 2021. This package aims to promote domestic semiconductor manufacturing in India. As part of the incentive program, the government is providing a 50% subsidy on capital expenditure to companies that establish chip manufacturing units within the country.

By choosing to pursue incentives separately, Foxconn is indicating its intent to navigate the semiconductor production plan as an individual entity. This approach allows Foxconn to explore its strategies, timelines, and investment plans tailored to its specific requirements and objectives. It gives the company more flexibility and control over its semiconductor manufacturing operations in India.

Foxconn’s decision highlights its commitment to establishing a strong presence in India’s semiconductor industry, potentially leveraging the government’s incentives to enhance its manufacturing capabilities and contribute to the growth of the domestic semiconductor ecosystem.

Under the India Semiconductor Mission (ISM), states in India were prepared to offer additional subsidies of 15-25% to attract semiconductor projects. This means that up to 75% of the total project cost could potentially be covered by these subsidies. These additional incentives were aimed at encouraging companies like Foxconn to invest in semiconductor manufacturing in India and boost the country’s domestic semiconductor industry.

Earlier reports indicated that it was engaged in advanced discussions with European company STMicro and US-based GlobalFoundries for a potential technology partnership in the joint venture with Vedanta. The Central government had emphasized the need for a technology partner for Vedanta-Foxconn, as they lacked expertise in semiconductor manufacturing. As a result, Foxconn was exploring the possibility of collaborating with STMicro or GlobalFoundries to strengthen its semiconductor manufacturing plans in India.

By considering partnerships with established semiconductor companies like STMicro and GlobalFoundries, the compnay aimed to leverage their expertise, experience, and technology know-how in semiconductor manufacturing. These collaborations would have provided Foxconn with the necessary knowledge and resources to enhance its capabilities in setting up semiconductor fabrication units in India.

While the outcome of these discussions and potential partnerships is unclear at the moment, the engagement with STMicro and GlobalFoundries suggests that Foxconn is actively exploring strategic alliances to bolster its semiconductor manufacturing plans in India and tap into their expertise to drive the success of its operations in the country.