When Foxconn has strengths in manufacturing and HCL is dealing with the design side, this JV will still require a technology partner to obtain government approval for incentives.
A breakthrough for India’s semiconductor program has been achieved through the collaboration of Indian conglomerate HCL with Taiwanese electronics company Foxconn in setting up an OSAT unit that will be located in India. There are no details yet about what type of OSAT they intend to establish, but the deal would add incremental growth in India if it were approved, adding even more strength and volume to its semiconductor ecosystem.
Like Micron, its JV would be for testing and packaging semiconductor chips. Danish Faruqui, CEO of Fab Economics, told Business Today: “OSATs are like those foundries but for assembly testing and packaging so any fab can provide fabricated wafer (output from a fab) now the OSAT will assemble test in the pack to finalize the product. Some successful names globally include ASE Amkor JCET.”
Satya Gupta, President of VLSI Society discusses in this joint venture that Foxconn can produce the finished chips and use a sizable portion of their leading electronics manufacturing business. Although HCL began as a hardware company currently it provides design services mainly in the Semiconductor field which will help it forward on the value chain.
Although Foxconn has the manufacturing know-how and HCL, has been working on the design side of things; there would be a need for a technology partner to get government approvals while JV will require added incentives to succeed. “For even the OSAT, they will still need a technology partner. But plain vanilla chip packing should not be too difficult either; if the JV shows some of that stuff-the technological models and so on — then it might get approved,” says independent semiconductor analyst Arun Mampazhy.
However, this is just until the JV does not start pursuing Advanced chip packaging.
Fab Economics, a US-based boutique semiconductor Fab/ATMP /OSAT Greenfield projects advisory and implementation practice as well as a talent development firm for Semi manufacturing & and packaging based in India believes that this Joint Venture could open many more new opportunities not only to the country but also industrially craving people from elsewhere. The joint venture between Foxconn and HCL to establish an OSAT facility in India is estimated at half of the investment announced last year by Micron for setting up an ATMP unit in India. Therefore, we consider it an incremental development for India to further develop its semiconductor ecosystem rather than a revolutionary paradigm shift. But, Foxconn- HCL JV OSAT raises some new opportunities for India in contrast with Micron’s ATMP unit also says Faruqui.
The HCL group is also venturing into the semiconductor ecosystem after Vedanta, Tata Hiranandani & L&T Indian conglomerates show their involvement. Their participation can make India an important player in the worldwide chip ecosystem.
