Expanding Local Manufacturing Capabilities
Foxconn, the Taiwanese electronics giant, has announced plans to invest around $1 billion to establish a smartphone display module assembly facility in Tamil Nadu. This initiative marks the company’s first venture into display module assembly in India, aimed predominantly at supporting production for Apple’s iPhone. This move aligns with Foxconn’s broader strategy to enhance its manufacturing footprint in India and includes efforts to start assembling Google Pixel phones in the country.
Enhancing India’s Electronic Manufacturing Sector
The proposed investment by Foxconn is expected to significantly boost India’s status in the global electronics value chain. The addition of display assembly operations could increase local value addition by 2-3%, on top of the current 5% achieved through phone assembly. The new facility will not only benefit Foxconn but will also enable other manufacturers like Pegatron and Tata Electronics to source display modules locally rather than importing from China, thus fostering a more robust supply chain ecosystem within India.
Challenges and Opportunities
While this development is seen as a positive step towards self-reliance in electronics manufacturing, industry experts caution about potential challenges, such as the dependency on component supplies from China and a lack of local expertise in advanced display technology. However, setting up this unit could decrease lead times and costs by reducing reliance on imports from China, which currently account for a significant portion of India’s display needs.
Foxconn’s commitment to expanding its operations in India is part of a larger strategy to diversify its global supply chains, with Apple also looking to reduce its dependency on Chinese manufacturing. The establishment of the display module assembly unit is a significant move to strengthen India’s position in the global electronics market, showcasing the country’s growing capabilities in high-tech manufacturing.
