The Significance Of Foxconn Chairman Young Liu Meeting PM Modi

Foxconn Chairman Young Liu met Prime Minister Narendra Modi today to discuss the company's future growth plans in in India.

Post the meeting, PM Modi tweeted welcoming Foxconn's plans for the country

Hon Hai Precision Industry Co., Ltd., better known as Foxconn, is a Taiwanese electronics contract manufacturing behemoth. Though it is headquartered in Taiwan, it is the largest private employer in China and is among the top ten employers worldwide.

Foxconn's founder Terry Gou stepped down as Chairman of Foxconn in June 2019 ahead of his bid to win the Kuomintang (KMT) party primary elections, which he eventually lost. KNT, currently the main opposition party of China, is considered by many as pro-China, though its Chairman has denied it as recently as early this month.

When Terry Gou stepped down, Young Liu, then the general manager of Foxconn's semiconductor unit, became the Chairman. He is widely regarded as the semiconductor expert at Foxconn and is counted among the key decision-makers regarding Foxconn's plans for semiconductor fabs.

Liu is also keen on expanding Foxconn into the electric vehicles market. Foxconn has set an ambition goal of capturing at least 5 percent share of the global electric vehicle market by 2025 and aiming to generate US$30 billion in EV sales. It will face tough competition from established players like Tesla, Volkswagen and General Motors.

In Oct 2021, Foxconn unveiled three new electric vehicle models during the Hon Hai Tech Day 2021 (HHTD21) at the Taipei World Trade Center Nangang Exhibition Hall.

As part of his ambitious drive to establish Foxconn as a key player in the EV market, Liu has established a partnership with Yulon, the leading automaker of Taiwan.

Last week, Foxconn broke ground on its first battery cell plant as it moves to deepen its presence in the global electric vehicle (EV) supply chain. Foxconn will invest over $200 million in building a battery cell center in in the southern port city of Kaohsiung in Taiwan.

The battery cell center — which would house research and development, as well as production — would be in the city’s Ho Fa Industrial Park and is expected to start mass production in the first quarter of 2024, Hon Hai said. The company will trial produce lithium iron phosphate batteries -- the same type of battery that China's battery behemoth Contemporary Amperex Technology Ltd. makes.

Foxcon also bought a factory from the US startup Lordstown Motors Corp in order to manufacture electric cars. Back in August 2021, Foxconn purchased a chip plant in Taiwan to fulfill the future demands for automotive chips.

India Plans

To diversify its supply chain beyond China, Foxconn is reported to be planning to manufacture electric vehicles in India. Prime Minister.

The company is likely to set up an EV manufacturing unit in India through its subsidiary Foxtron.

Modi mentioning India's EV push in the tweet to welcome Young Liu holds great significance in this context.

As for electronics manufacturing, Foxconn is a beneficiary of the PLI scheme, which has given a significant boost to mobile manufacturing in India.

On the semiconductor fab front, Vedanta Chairman Anil Agarwal had said a month ago that it finalize a location for its proposed fab with Foxconn as a technical partner by mid-June. In addition to the semiconductor fab, Vedanta has also proposed to set up a display fab in India with Innolux - a subsidiary of Foxconn - as a technology partner.

Liu's visit could be linked to finalizing the site for both these fabs. These proposals also need approval from India Semiconductor Mission and could be eligible to receive up to 50% incentives.