Top Apple supplier Foxconn plans major India expansion

Foxconn also plans to build a new manufacturing facility in the southern state of Karnataka, where it will make products including iPhones, people familiar with the matter said.

In addition, Foxconn is considering building a new manufacturing site in the southern city of Hyderabad, as well as a silicon carbide factory and packaging plant in India for its semiconductor business, one of the people said.

Foxconn’s expansion plans are under review and subject to change.

Foxconn chairman Young Liu visited both Bengaluru, in Karnataka state, and Hyderabad during a visit to India this week, while also meeting Prime Minister Narendra Modi in New Delhi. The Modi government has introduced billions of dollars in incentives in recent years to lure global manufacturers to India, as part of a major push to increase advanced manufacturing jobs and reduce dependence on electronics imports.

Apple has pushed suppliers to diversify beyond China after many of them faced production disruptions in China several times during Covid-19 shutdowns. Meanwhile, geopolitical tensions have grown between the United States and China, as well as between Beijing and Taiwan, where Foxconn is based. Beijing considers Taiwan, a democratically ruled island near mainland China, to be part of its territory.

China has been the largest manufacturing hub in the electronics supply chain for years, with Apple a major driver having built much of its supply chain and assembly in the country over the past two decades.

Concerns about this reliance grew after protests broke out at the world’s largest iPhone manufacturing site in Zhengzhou, central China, late last year, as frustration grew among workers over strict pandemic control guidelines and wages.

Still, expanding into India won’t mean companies like Apple and Foxconn abandoning China, supply chain executives say. The supply chain infrastructure that these companies have built over the past decades there cannot easily be replaced by other countries, they say. China also has a large workforce and experience in manufacturing.

Despite progress in local car and smartphone production in recent years, India has long trailed regional rivals in advanced manufacturing due to concerns over the country’s challenging bureaucracy, protectionist regulations and underdeveloped infrastructure.

A spokesman for Foxconn, formally known as Hon Hai Precision Industry Co., declined to comment on the plan, saying the company does not comment on specific customers or products. Apple did not immediately respond to a request for comment.

Bloomberg earlier reported on Foxconn’s expansion plan in Karnataka.

Mr. Liu’s India visit came just days after he was in Zhengzhou and visited Foxconn’s iPhone manufacturing campus and met with workers there, as well as meeting senior local officials.

India, along with Vietnam, has already been identified by Apple as a prime destination with the Cupertino-based company looking to diversify the sites where its products are assembled. Apple has asked its suppliers to plan more actively to assemble its products outside of China and elsewhere in Asia, particularly India and Vietnam, The Wall Street Journal has reported.

Taiwan-based contract manufacturers including Foxconn and Wistron corp.

has in recent years set up factories in India to produce iPhones mainly for the country’s domestic market.

Apple has also been working with contract manufacturers in India to speed up the manufacturing process to shorten the typical delay between when the devices are made in China and when they are manufactured in India, the Journal has reported.

— Selina Cheng contributed to this article.

Write to Rajesh Roy at rajesh.roy@wsj.com, Yoko Kubota at yoko.kubota@wsj.com and Philip Wen at philip.wen@wsj.com