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Foxconn-HCL JV Eyes Tamil Nadu or Telangana for $150M Chip Plant

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HIGHLIGHTS:
  • Foxconn and HCL are teaming up to build a $150 million chip plant in India.
  • They are considering Tamil Nadu or Telangana for the facility, with talks in advanced stages.
  • Both states offer attractive incentives, influencing the final decision on the plant's location.

The HCL group and Foxconn have joined forces to establish a semiconductor assembly and testing facility in India. This strategic move aligns with Foxconn's ambition to leverage India's chip-making incentives and marks a step toward the establishment of a separate chip manufacturing unit in the country.

Choice of Location: Tamil Nadu or Telangana?

According to a recent report by ET, the upcoming Outsourced Semiconductor Assembly and Testing (OSAT) unit is likely to be situated in either Tamil Nadu or Telangana. The OSAT unit is pivotal for chip fabrication companies as it offers third-party chip packaging and testing services. The initial investment for this joint venture is estimated at approximately USD 150 million (Rs. 1246 crores), excluding incentives from central and state governments.

Advanced-Level Talks and Incentive Structures:

The HCL-Foxconn collaboration is currently in advanced-level talks, indicating that a final decision on the matter is imminent. Both Tamil Nadu and Telangana have presented attractive incentive structures to entice the establishment of the semiconductor facility.

Tamil Nadu appears to be a strong contender due to Foxconn's extensive presence in the region, potentially leading to reduced logistic costs. However, Telangana has not lagged behind and has put forth an equally "attractive" proposal.

A senior central government official disclosed to ET, "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, power supply stability, and environmental clearances."

Factors Influencing the Decision:

Several factors will influence the final decision, including the cost of land, stability of power supply, and obtaining necessary environmental clearances. Both states are actively vying to create a conducive environment for the semiconductor facility.

Verdict:

In conclusion, the collaboration between HCL and Foxconn for a semiconductor assembly and testing facility in India is a positive development in the country's technological landscape. The choice between Tamil Nadu and Telangana for the OSAT unit underscores the competitiveness and attractiveness of both states in facilitating such high-tech investments.

As the talks reach an advanced stage, the final decision is eagerly anticipated, and it is clear that both states are actively working towards providing the necessary infrastructure and incentives for this pioneering venture. The establishment of this facility will not only boost the semiconductor sector in India but also contribute significantly to the nation's broader technological advancements.