By Vasudevan Sridharan | 2026-03-27

The foundation stone laid earlier this year for the HCL Group-Foxconn semiconductor facility in the northern Indian state of Uttar Pradesh has become more than just another industrial announcement.

HCL Group is an Indian tech conglomerate. Foxconn, based in Taiwan, is the world's largest contract manufacturer of electronics.

The coming plant has become a telling snapshot of the partnership between India and Taiwan in global chip making. They are working together out of shared ambition, political necessity and strategic alignment.

Though the recently unveiled project is modest compared to most cutting-edge fabrication plants, its significance is hard to miss. Approved at an investment of roughly 37 billion INR ($393 million), the facility near an airport is designed to produce display driver chips and process about 20,000 wafers monthly. Commercial production is expected to kick off in 2027.

Chips are king

These chips are essential to make smartphones, laptops and automobiles and sit at the heart of India's ballooning electronic manufacturing sector. Also important is basing the facility in Uttar Pradesh, a state that has witnessed rapid industrial growth in the past few years.

Prime Minister Narendra Modi has framed semiconductor manufacturing as central to India's goal of becoming a global manufacturing hub.

The HCL-Foxconn unit is part of the broader India Semiconductor Mission, under which India is rolling out multiple assembly and testing facilities.

The latest partnership brings together HCL's engineering and system expertise with Foxconn's global manufacturing scale and semiconductor capabilities. The joint venture is consistent with India's push to combine domestic talent and market demand with foreign technology and supply chain experience.

"India's semiconductor industry is still at a nascent stage and is building up its capabilities with strong government support," Prachir Singh, a senior analyst at Counterpoint Research, told Focus.

Early projects have focused on Outsourced Semiconductor Assembly and Test, he said, adding that India hopes that a future semiconductor fabrication plant being built by the Tata conglomerate and Taiwan's PSMC in Gujarat state will help it join global supply chains "much like countries such as Malaysia and Singapore have done."

Industry executives describe these collaborations as essential to meet global demand for high tech while keeping local capability robust.

Growing interdependence

For India, Taiwan exerts powerful attraction. Taiwanese firms dominate large swathes of the global semiconductor value chain, from fabrication to packaging. Companies such as TSMC (Taiwan Semiconductor Manufacturing Co.) have built elaborate ecosystems over decades, buttressed by dense supplier networks. By contrast, India's manufacturing depth is still limited.

"As for the Foxconn-HCL plant, it is another step in this direction, concentrating on display driver chips, a segment where they can be confident of steady demand ... It fits into Foxconn's broader expansion strategy in India, which also includes a display manufacturing unit in the south," said Singh.

Taiwan is providing technology, process knowledge and supply chain integration so India can catch up.

"HCL Technologies, through its partnership with Foxconn, is using display driver ICs [integrated circuits] as an entry point to build capabilities," Singh said.

Taiwanese support of India's tech manufacturing ambitions is visible too in other projects. They include collaborations between Indian firms and Taiwanese contract manufacturers such as Foxconn, Pegatron and Wistron, which have become central to India's electronic manufacturing ecosystem.

Geopolitics at work

Taiwan's interest in India has also been shaped by shifting geopolitics and economic calculations. As global supply chains adjust to tensions involving China, companies are seeking alternative manufacturing bases.

India, with its large domestic market, policy incentives and expanding workforce, offers both scale and diversification in the West's China+1 strategy.

The steady rise in India-Taiwan trade, chiefly driven by electronics and ICs, underscores this growing interdependence.

As of 2025, more than 300 Taiwanese companies operate in India. They have created about 200,000 jobs there.

Taiwanese-Indian trade in 2025 exceeded $12.5 billion.

Hurdles to overcome

Yet, India's semiconductor ambitions continue to run up against structural constraints, from gaps in infrastructure and limited supply chain depth to the sheer expense of chip manufacturing.

Past setbacks, including stalled or reworked semiconductor projects, highlight the complexity of execution. Even the HCL-Foxconn facility, while key, is an assembly and testing unit rather than a full-scale fabrication plant, as India builds incrementally rather than commit errors of haste.

Observers expect such investments to gradually create an ecosystem capable of supporting more-sophisticated manufacturing in the future. In that sense, the HCL-Foxconn project is a starting point in the India–Taiwan semiconductor partnership.