Foxconn-HCL JV eyes Tamil Nadu or Telangana for chip plant

This week, the HCL group and Foxconn announced their partnership for a semiconductor assembly and testing facility in India. This aligns with Foxconn’s vision of utilizing India’s chip making incentives by applying for a separate chip manufacturing unit in the country.

According to a recent report from ET, the upcoming OSAT (outsourced semiconductor assembly and testing) unit is likely to be set up in Tamil Nadu or Telangana.

An OSAT unit plays a significant role for chip fabrication companies by offering third-party chip packaging and testing services. The initial investment of the JV is estimated around USD 150 million (Rs. 1246 crores approx.), excluding incentives from central and state governments.

The report suggests that the HCL-Foxconn joint venture is in “advanced-level talks,” meaning the matter will be finalized soon. Both states are reported to have offered attractive incentive structures for setting up the plant.

There’s a high possibility of choosing Tamil Nadu due to Foxconn’s wider presence, potentially reducing logistic costs. Telangana, on the other hand, is also said to have proposed an “attractive” proposal.

Regarding the matter, a senior central government official told ET that,

These talks are at an advanced level. Telangana also has a serious proposal and their incentive structure is also attractive. A lot depends on where the unit is finally set up, including the cost of land, the power supply stability and environmental clearances.