Hon Hai's Global Expansion: Investing in India and Vietnam for Apple and AI Dominance

Taiwan's Foxconn Bolsters Production Capacity for Apple Products and AI Servers in Key Markets

Taipei, April 2 – Taiwanese manufacturing powerhouse Hon Hai Precision Industry Co., better known as Foxconn, is strategically expanding its global footprint, significantly increasing investments in both India and Vietnam. Sources suggest these moves are primarily aimed at bolstering production capacity for Apple Inc. products and, importantly, for artificial intelligence (AI) servers.

In a filing with the Taiwan Stock Exchange, where Hon Hai shares are traded, the company revealed a US$32.26 million equipment purchase from Apple Operations Ltd. since October 25, 2024. This investment is directed towards its Indian operation, conducted through the subsidiary Foxconn Hon Hai Technology India Mega Development Private Ltd.

While Hon Hai cited operational needs as the reason for these purchases, sources indicate this investment is geared towards supporting AirPods production for Apple in India. This move signifies a deepening of the Apple-Hon Hai partnership within the rapidly growing Indian market.

Reports in India suggest Hon Hai is scheduled to begin manufacturing AirPods in April at a facility in Hyderabad, the capital of Telangana. This marks AirPods as the second Apple product, following iPhones, to be manufactured in India by Hon Hai.

According to the sources, Hon Hai has a history of equipment purchases from Apple Operations, and previous purchases were for iPhone production in India. This ongoing investment highlights the importance of the Indian market for both companies.

Further demonstrating its commitment to global expansion, Hon Hai also announced an additional US$23.40 million injection into Fulian Precision Technology Component in Vietnam, channeled through its subsidiary Ingrasys (Singapore) Pte. Ltd. This investment is categorized as long-term.

In March, Hon Hai disclosed that Ingrasys, a cloud solution provider, had invested approximately US$17.96 million in Fulian Precision. Established in 2023 in Vietnam's Quang Chau province, Fulian Precision specializes in the production of servers, server racks, and communication devices.

Sources indicate that Hon Hai's increasing investments in Vietnam are specifically targeted at expanding its AI server production capabilities. This strategic focus underscores the company's ambition to capitalize on the burgeoning demand for AI solutions.

Hon Hai, the world's leading contract electronics manufacturer, anticipates that the AI servers it assembles will constitute 50 percent of its total server revenue this year. Furthermore, the company aims to capture a significant market share, exceeding 40 percent, of the global AI server market.

To achieve these ambitious goals, Hon Hai is actively expanding its AI server capacity across various regions, including Taiwan, the United States, Mexico, and Vietnam. This multi-faceted approach provides the company with the flexibility needed to adapt its high-end AI server production in response to evolving market dynamics.