Taiwanese electronics major Foxconn will take another shot at India’s growing semiconductor space, this time partnering HCL to set up a display drivers chip plant in India at an investment of ₹3,700 crore.
The Union cabinet on Wednesday approved a joint venture plant between HCL and Foxconn that will be built near Jewar airport under the Yamuna Expressway Industrial Development Authority (YEIDA) in Uttar Pradesh. The plant will manufacture display driver chips for mobile phones, laptops, automobiles, PCs and other devices with displays.
The plant is designed for 20,000 wafers per month. The design output capacity is 36 million units per month. It is expected to start production in 2027.
Back in 2022, Foxconn had partnered Vedanta with plans to invest $19.5 billion to set up semiconductor fabs in India and Gujarat was selected as the final location. However, by 2023, the plan was dropped with both sides deciding to end the joint venture.
The plant will get the benefit of the incentives that are part of the India Semiconductor Mission, which offers fiscal incentives of up to 50 per cent of the project cost across different categories.
Growing ecosystem
Union minister for electronics and information technology Ashwini Vaishnaw said that the semiconductor industry is gradually shaping up in the country, with the Centre approving its sixth unit under the India Semiconductor Mission.
“This plant will make display driver chips, and this is a big requirement because electronics manufacturing is growing at a fast pace in the country,” Vaishnaw said, adding that the government is also focusing on the development of the entire semiconductor ecosystem.
Applied Materials and Lam Research are two of the largest equipment manufacturers that already have a presence in India. Merck, Linde, Air Liquide, Inox and many other gas and chemical suppliers are gearing up to support the growth of the semiconductor industry.
Among the previous five projects that the government has approved under the Mission are Micron’s unit in Gujarat, Tata Electronics’ semiconductor fab unit in Gujarat and an assembly and assembly, testing, marketing and packaging (ATMP) unit in Assam, CG Power’s ATMP unit in Gujarat and Kaynes Semicon’s unit in Gujarat. These five together have a cumulative investment of ₹1,52,000 crore.
“The project brings large-scale advanced packaging and testing capabilities specifically for display driver ICs (integrated chips) — addressing a critical gap in India’s display and electronics value chain. It reflects India’s growing maturity in semiconductor manufacturing with trusted partners, strategic intent and industrial scale,” said Ashok Chandak, president of IESA and SEMI India.
Road ahead
Foxconn’s proposed investment in India comes at a time it has downgraded its full-year outlook on Wednesday. The company, which is Apple’s top iPhone assembler and Nvidia’s AI server maker, has ridden the crest of the wave for artificial intelligence demand, but is also vulnerable to changes in US trade and tariff policy given its large manufacturing footprint in China and Mexico.
Foxconn chairman Young Liu said during an earnings call that US tariffs will bring more challenges, and his outlook for the full year was more cautious than earlier after the company predicted significant growth for 2025 compared with a previous outlook of strong growth.
While Washington and Beijing have agreed to slash tariffs for at least 90 days, the cheer over the temporary truce was tempered by caution, given that a more permanent trade deal needs to be struck, while higher tariffs overall could still weigh on the global economy.
Apple, which sources parts from Foxconn, had earlier indicated that it would be sourcing the majority of its phones sold in the US from India.
