Foxconn, the Taiwanese contract manufacturer, is considering investing approximately $1 billion in establishing a smartphone display module assembly unit in Tamil Nadu, according to informed sources. This facility will be the first of its kind for Foxconn in India, with the primary goal of serving Apple‘s iconic iPhone.
Foxconn is set to establish the new display module assembly unit in India, alongside its plans to assemble Google Pixel phones in the country.This strategic move is seen as a step towards streamlining Foxconn’s expanding smartphone business in India, while also aiming to dominate in various sectors such as ICT, EVs, batteries, and semiconductors.
Industry experts believe that Foxconn’s proposed unit will undoubtedly elevate India’s position in the electronic assembly and manufacturing value chain. Tarun Pathak, research director at Counterpoint, said, “While phone assembly gives you a local value add of about 5%, display assembly will give additional value add of 2-3%. It all boils down to (how much of) the value addition will happen in India.”
The company’s model, however, will allow other contract manufacturers, such as Pegatron or Tata Electronics, to utilize components from this unit instead of importing modules assembled in China, as mentioned by the sources. Although no specific timeline has been set, insiders have informed ET that Foxconn aims to have the facility operational “as soon as possible.”
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“Foxconn has picked up about 500,000 square feet at a plug and play facility at the ESR Oragadam Industrial & Logistics Park, which is right next to their smartphone assembly unit near Chennai,” one source told the financial daily.
According to an industry consultant, the establishment of a local display module assembly unit is a significant development for a manufacturer in India.
Currently, the country heavily relies on imports for its display needs, primarily from China (60-65% across segments and up to 90% in specific segments) and South Korea (20-25%). By setting up local assembly operations, manufacturers can reduce their time to market and supply cycles for brands, thereby reducing lead times and costs.
Some of the key players in the display module industry include Samsung Display (South Korea), BOE Technology (China), LG Display (South Korea), Tianma Microelectronics (China), AU Optronics (Taiwan), and Japan Display Inc (Japan). At present, the largest smartphone display module assemblers in India are Chinese companies TCL CSOT in Tirupati, Andhra Pradesh, and TXD (India) Technology in Bawal, Haryana, catering to brands like Samsung, Xiaomi, Vivo, and Oppo.
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However, experts highlight potential challenges for India-based units, such as issues related to the supply of components, which mostly originate from China. Additionally, India lacks a well-developed skillset familiar with advanced display technologies, which might hinder the scale-up of operations.
Foxconn’s efforts to deepen its supply chain in India align with Apple’s aggressive diversification strategy away from China. The tech giant has been sharpening its focus on India through partners like Foxconn, who have been significantly expanding their operations in the country.