Foxconn plans $1 billion display assembly unit in Tamil Nadu

Foxconn is evaluating an investment of about $1 billion to set up an assembling unit for smartphone display modules in Tamil Nadu, according to people aware of developments.

This will be the first such facility to be set up by the Taiwanese contract manufacturer in India, from where it plans to primarily cater to Apple for the iconic iPhone.

However, Foxconn's model is going to be one wherein even other contract manufacturers—Pegatron or Tata Electronics, for instance—can use components from this unit rather than import modules that are assembled in China, said those cited above.


While there is no fixed timeline, people in the know told ET the company wanted the facility up and running “as soon as possible.”

Queries sent to Foxconn remained unanswered as of press time on Tuesday.

Growing smartphone business

“Foxconn has picked up about 500,000 square feet at a plug and play facility at the ESR Oragadam Industrial & Logistics Park, which is right next to their smartphone assembly unit near Chennai,” one person cited above told ET.

Experts are of the view that Foxconn’s proposed unit will definitely push India up the value chain in electronic assembly and manufacturing.

“While phone assembly gives you a local value add of about 5%, display assembly will give additional value add of 2-3%," said Tarun Pathak, research director at Counterpoint. “It all boils down to (how much of) the value addition will happen in India.”

With Foxconn also set to assemble Google Pixel phones in India, the new unit is being viewed as a strategic move to smoothen the process further.

The Taiwanese major is aggressively expanding its smartphone business in India, while also looking to dominate in sectors like information and communication technology (ICT), electric vehicles (EV), batteries, semiconductors and more.

A consulting firm executive tracking the sector said it was “significant” for a manufacturer to assemble display modules in India. India currently relies heavily on imports for its display needs, which contributes to increased input costs and supply chain complexities.

China connection

The executive estimated that imports of display modules come predominantly from China—60-65% across segments and up to around 90% in specific segments—and South Korea, the second-largest supplier at 20-25%. “By setting up local assembly operations, manufacturers can reduce their time to market or supply cycles for brands, reducing lead their (own) times and costs,” he said.

Some of the key players in display modules are Samsung Display (South Korea), BOE Technology (China), LG Display (South Korea), Tianma Microelectronics (China), AU Optronics (Taiwan), and Japan Display Inc (Japan).

Currently, the largest smartphone display module assemblers in India are Chinese players TCL CSOT in Tirupati, Andhra Pradesh, and TXD (India) Technology, in Bawal, Haryana. CSOT has been assembling display modules for Samsung and Xiaomi, while TXD caters to Vivo and Oppo.

Experts point to challenges that India-based units will encounter, including issues around supply of components, which mostly originate from China. Further, India does not have a well-developed skillset familiar with advanced display technologies, which might hinder scale-up of operations.

Foxconn deepening its supply chain in India ties into Apple's aggressive diversification from China. The Cupertino-based tech giant has been sharpening its focus on India through partners like Foxconn, who have been significantly expanding operations.