Apple's Semiconductor Vendor Foxconn to Ramp up their Investments in India, Seeking Diversification

Foxconn Technology Group, Apple Inc.'s main supplier, plans to increase its investment in Karnataka to more than $1.2 billion and add two component factories, continuing a steady diversification away from China to mitigate the risks of US economic and technology sanctions.

According to people familiar with the matter, at least one of the factories that the Taiwanese company plans to build in Karnataka will produce Apple parts, including those for iPhones. A formal announcement is expected as early as this week, according to the people, who declined to be identified because the matter is private. The second plant will also be in Karnataka, but the exact location is unknown.

Foxconn is spending $500 million on these two complexes on top of a $700 million facility it aims to build on a 300-acre site close to the airport in Bengaluru, the capital of Karnataka, Bloomberg News previously reported. That plant is likely to assemble iPhones and expected to create about 100,000 jobs.

The additional sites will bring the Apple partner's planned new spending for India to more than $1.2 billion, a sizable investment for a Taiwanese company that has traditionally sourced the vast majority of devices for Apple and other US brands from central and southern China.

Foxconn's moves in India demonstrate how the South Asian country has quickly become a popular destination for manufacturers looking for an alternative to China as tensions between Washington and Beijing rise. It is also the result of a shift in the global supply chain that accelerated during the Covid-19 pandemic and the Ukraine war, and it has the potential to reshape the way electronics are manufactured.