Foxconn to Establish iPhone Manufacturing Facility in Bengaluru by April Next Year
- ByStartupStory | June 2, 2023
The Karnataka government has provided assurance to a delegation from Hon Hai Technology Group (Foxconn) that the land parcel will be transferred to the iPhone maker within one month. This move will enable the company to proceed with its plans of commencing production at the proposed Bengaluru facility, with a target date of April 1 next year.
In Bengaluru, a high-level delegation from Foxconn, the largest contract manufacturer globally, engaged in discussions with Industries Minister MB Patil and IT/BT Minister Priyank Kharge regarding the progress of their upcoming project.
“Senior Management representatives of #Foxconn visited me to discuss the establishment of an #iPhone assembly plant at Devanahalli. We addressed project-related challenges, emphasizing the development of vital industrial infrastructure and maximizing the creation of employment opportunities,” Patil tweeted, adding Kharge was with him during the talks.
According to a government statement, the forthcoming project will aid the new Congress regime in expediting job creation by adding approximately 50,000 employment opportunities over a specific timeframe.
The company has requested a daily water supply of five million litres. Assurances were given by Patil that the government will fulfill the facility’s water requirements, as well as address other necessities like road and power supply. In order to assist the company in recruiting skilled individuals, the government has requested information regarding the specific skills that they would anticipate from new hires.
As per the statement, the Taiwanese iPhone maker intends to construct the plant in three phases with a target production of 20 million smartphones annually. Already, the company has made a payment of Rs 90 crore, equivalent to 30% of the land cost, to the Karnataka Industrial Areas Development Board (KIADB). In March, Karnataka’s High Level Clearance Committee, led by the chief minister, granted approval to Foxconn’s proposal of establishing a mobile phone manufacturing unit on the outskirts of Bengaluru. The investment for this project is estimated to be Rs 8,000 crore.
The upcoming plant, situated on a 300-acre land near Bengaluru International Airport, will mark Foxconn’s largest manufacturing facility in India. The approval from the committee comes as a result of a memorandum of understanding signed between the state government and Foxconn during a visit by the company’s chairman, Young Liu, to Bengaluru.
Foxconn’s intensified focus on the Indian market is fueled by the robust domestic demand for iPhones and a notable increase in exports from India, driven by the worldwide shift of global supply chains away from China. Presently, the company operates iPhone manufacturing facilities in Tamil Nadu, Andhra Pradesh, and Telangana, catering to Apple’s requirements. Sources familiar with the situation have indicated that, in addition to iPhones and their components, Foxconn is contemplating the production of various other electronic goods and electric vehicle parts at the new plant.
Officials are optimistic that a Foxconn investment will serve as a catalyst for attracting numerous prominent global electronics companies to Karnataka. Foxconn presently operates two facilities in India. One is located in Sriperumbudur, Tamil Nadu, under the Hon Hai brand, where iPhones are manufactured. The second facility, operated by Bharat FIH (formerly known as Rising Star), is situated in Sri City, Andhra Pradesh, and acts as a contract manufacturer for brands like Xiaomi.
In a significant move, Foxconn revealed plans in the previous year to invest $500 million in its Indian subsidiary, Hon Hai Technology India Mega Development. Furthermore, earlier this year, the state of Karnataka amended the Factories Act of 1948, enabling an increase in the maximum working hours per day for employees from nine to twelve hours, with appropriate breaks. Additionally, the amendment permits the deployment of women during night shifts in factories, provided necessary safeguards are implemented.
Karnataka aims to embrace contemporary labor practices observed in Western countries and China, positioning itself as a frontrunner in the cutting-edge electronics and semiconductor industries. Longer work hours are common in high-end electronics manufacturing, and the implementation of two shifts with 12-hour cycles would be beneficial. This transition is expected to facilitate a favorable environment for investors in electronics system design and manufacturing (ESDM). Karnataka has been actively promoting itself as a prominent investment destination within the emerging technology sector.
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