Hon Hai invests more in India, Vietnam to boost capacity

Taipei, April 2 (CNA) Taiwan-based manufacturing giant Hon Hai Precision Industry Co. has increased its investment in India and Vietnam, which sources said were likely made to expand capacity for Apple Inc. products and artificial intelligence servers.

In a statement filed Tuesday with the Taiwan Stock Exchange, where Hon Hai shares are traded, the company said it had bought US$32.26 million in equipment from Apple Operations Ltd. since Oct. 25, 2024 for its Indian operation through subsidiary Foxconn Hon Hai Technology India Mega Development Private Ltd.

While Hon Hai, one of Apple's most important suppliers, said the purchases were made to meet operational needs, the sources believed the investment was made to support AirPods production for Apple in India.

India's news media reported in mid-March that Hon Hai was scheduled to begin manufacturing AirPods in April in a facility located in Hyderabad, the capital and largest city of the Indian state of Telangana.

The reports said AirPods will be the second Apple product Hon Hai rolls out in India after iPhones.

The sources said Hon Hai, better known globally as Foxconn, has repeatedly purchased equipment from Apple Operations, and that previous purchases were for iPhone production in India.

Hon Hai also said in the statement that it has injected an additional US$23.40 million into Fulian Precision Technology Component in Vietnam through another subsidiary -- Ingrasys (Singapore) Pte. Ltd. -- as a long-term investment.

In March, Hon Hai announced that Ingrasys, a cloud solution provider, invested about US$17.96 million in Fulian Precision, which was set up in 2023 in Vietnam's Quang Chau province and specializes in producing servers and server racks as well as communications devices.

The sources said Hon Hai's increasing investments in Vietnam were aimed at expanding its AI server production.

Hon Hai, the world's largest contract electronics maker, said the AI servers it assembles are expected to account for 50 percent of its total server revenue and seize a more than 40 percent share of the global AI server market this year.

According to Hon Hai, it is currently expanding AI server capacity in several areas, including Taiwan, the United States, Mexico and Vietnam, to give the company flexibility in adjusting high-end AI server production based on market conditions.