HCL-Foxconn JV Not a Fabrication, Rather OSAT

After a failed attempt to build India's first semiconductor fabrication unit in Gujarat, Taiwanese company Foxconn has now entered into a joint venture (JV), this time, with HCL.

The plant, to be built near Jewar airport under the Yamuna Expressway Industrial Development Authority (YEIDA) in Uttar Pradesh, will make display driver chips for mobile phones, laptops, automobiles, PCs and other devices with displays.

Display driver chips are responsible for how screens render images, text, and videos.

The project was announced by India’s IT Minister Ashwini Vaishnaw at a press conference in New Delhi on Wednesday. However, there has been some confusion over whether the facility is a full-fledged fabrication unit or merely an assembly and packaging plant.

The plant will initially operatea as an OSAT (outsourced semiconductor assembly and test) facility due to the absence of advanced chip fabrication capabilities in the country, the facility will not begin with chip manufacturing. Instead, it will focus on packaging and testing chips produced in other countries.

Interestingly, high-end Apple chips, which power its latest iPhones, iPads and MacBooks, could be packaged in the plant.

So far, India's only chip fabrication unit is still under construction. Developed by Tata Electronics and Taiwan's Powerchip Semiconductor Manufacturing Corporation (PSMC), the fab is expected to be operational in December 2026.

However, multiple packaging and testing units have been approved by the centre, such as Tata's testing and assembly unit in Morigaon, Assam.

In 2022, Foxconn and Vedanta entered into a JV to develop India's first fabrication unit in Gujarat. Both parties even signed a Memorandum of Understanding (MoU) with the Government of Gujarat.

However, the project ran into significant challenges. Following a series of setbacks, both parties decided to part ways and pursue their semiconductor ambitions independently.