India’s cabinet has approved a new semiconductor manufacturing unit, according to Information Minister Ashwini Vaishnaw.

This project, a joint venture between HCL Group and Foxconn, is estimated to cost 37.06 billion rupees (around US$434.4 million).

The facility will be established in the northern state of Uttar Pradesh, as the country seeks to strengthen its domestic semiconductor production capabilities.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ India’s shift from missed semiconductor opportunities to strategic manufacturing

The HCL-Foxconn joint venture represents a significant pivot from India’s historical semiconductor manufacturing struggles.

In 2007, Intel chose China over India for a $2.5 billion chip plant after the Indian government’s delays in finalizing semiconductor investment policies, as highlighted by Intel’s Chairman Craig Barrett 1.

This pattern of missed opportunities has contributed to India’s overwhelming dependency on imported chips, with integrated circuit imports surging by 281% to $8 billion in 2018, with 64% coming from China 2.

The new $434.72 million OSAT (Outsourced Semiconductor Assembly and Testing) facility in Uttar Pradesh is part of a broader strategy that includes five government-approved semiconductor projects totaling $18 billion 3.

For Foxconn, this marks its second attempt to enter India’s semiconductor market, demonstrating persistent interest despite previous challenges 4.

This JV strategically combines HCL’s semiconductor design expertise with Foxconn’s manufacturing capabilities at a time when India is actively working to reduce its import dependence.

2️⃣ Timing aligns with unprecedented global semiconductor growth

India’s semiconductor manufacturing push comes during a period of extraordinary industry expansion, potentially maximizing the economic impact.

Global semiconductor sales reached $627.6 billion in 2024, representing a 19.1% increase from 2023, with projections indicating continued growth to $697 billion in 2025 5.

The industry has experienced ten consecutive months of year-over-year sales growth through February 2025, with particularly strong performance in the Americas region, which saw a 48.4% increase 6.