Top Apple supplier Foxconn plans major expansion in India

Foxconn, formally known as Hon Hai Precision Industry Co., is also planning to build a new manufacturing facility in the southern state of Karnataka where it will make iPhones, among others, people familiar with the matter said.

In addition, Foxconn is considering building a new manufacturing site in the southern city of Hyderabad, as well as a silicon carbide plant and packaging facility in India for its semiconductor business, some people said.

Foxconn’s expansion plans are being considered and may change.

Foxconn chairman Young Liu visited both Bengaluru, in Karnataka state, and Hyderabad on a visit to India this week, while also meeting with Prime Minister Narendra Modi in New Delhi. The Modi government has introduced billions of dollars in incentives in recent years to attract global manufacturers to India, as part of a major move to boost advanced manufacturing jobs and reduce dependence on electronics imports.

Apple is urging suppliers to diversify outside of China after many of them suffered multiple production disruptions in China during the Covid-19 lockdowns. Meanwhile, geopolitical tensions have increased between the US and China, as well as between Beijing and Taiwan, where Foxconn is based. Beijing considers Taiwan, a democratically governed island near mainland China, to be part of its territory.

China has been the largest manufacturing center in the electronics supply chain for many years, with Apple serving as a major driver after building much of its supply chain and assembly in the country over the past two decades.

Concerns about that dependency increased after protests erupted late last year at the world’s largest iPhone manufacturing site in Zhengzhou, central China, as workers’ frustration grew over tight pandemic control policies and wages.

Still, expansion into India doesn’t mean companies like Apple and Foxconn are leaving China, supply chain executives say. The supply chain infrastructure these companies have built there over the past few decades cannot easily be replaced by other countries, they say. China also has a large workforce and experience in production.

Despite advances in local car and smartphone production in recent years, India has long lagged regional rivals in advanced manufacturing due to concerns over the country’s challenging bureaucracy, protectionist regulations and underdeveloped infrastructure.

“Foxconn will continue to communicate with local governments to seek the most beneficial development opportunities for the company and all stakeholders,” said Mr. Liu in a statement. Apple did not immediately respond to a request for comment.

Bloomberg previously reported on Foxconn’s expansion plan in Karnataka.

The visit of Mr. Liu came to India just days after being in Zhengzhou to visit Foxconn’s iPhone production campus and meet with employees there, as well as senior local officials.

India, alongside Vietnam, has already been identified by Apple as a prime destination, with the Cupertino-based company seeking to diversify the locations where its products are assembled. Apple has told its suppliers to plan more actively for assembling its products outside of China and elsewhere in Asia, particularly India and Vietnam, The Wall Street Journal reports.

Taiwan-based contract manufacturers, including Foxconn and Wistron Corp.

have set up factories in India in recent years to produce iPhones mainly for the country’s domestic market.

Apple has also worked with contract manufacturers in India to speed up the manufacturing process to shorten the typical delay between when the devices are made in China and when they are produced in India, the Journal reports.

—Selina Cheng contributed to this article.

Write to Rajesh Roy at rajesh.roy@wsj.com, Yoko Kubota at yoko.kubota@wsj.com, and Philip Wen at philip.wen@wsj.com