Taiwanese contract manufacturer Foxconn has tied up with HCL Group to start a semiconductor packaging and testing joint venture in India.
Foxconn Hon Hai Technology India Mega Development Pvt. Ltd, a subsidiary of Foxconn Group, will invest $37.2 million for a 40% stake in the joint venture, a regulatory filing with the Taiwanese and the London stock exchanges said.
“The investing entity will be changed from Big Innovation Holdings Ltd to Foxconn Hon Hai Technology India Mega Development Pvt. Ltd. The investment amount will also be revised to $37.2 million (from $29.4 million earlier),” the statement said, while adding that the deal is a “non-binding MoU (memorandum of understanding)”.
HCL Group did not respond to an emailed query on the deal.
Foxconn’s outsourced semiconductor assembly and test, or OSAT, agreement with HCL Group comes after it had called off a $19.5 billion semiconductor joint venture with Vedanta Ltd in July.
In November, HCL Group said it is closing in on a deal to set up semiconductor packaging and testing facility in Karnataka, with the state government offering land near the airport in Bengaluru and in Mysuru, The Times of India reported.
India had announced a $10 billion semiconductor incentive program in December 2021 under which both the central and state governments offer subsidies, covering about 75% of the capital expenditure incurred by firms in setting up chip facilities.
In December, minister of state for electronics and information technology Rajeev Chandrasekhar told Parliament that Foxconn had submitted an application to set up a semiconductor fabrication unit under the “modified scheme for setting up semiconductor fabs in India”.
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