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Taiwan’s Foxconn is partnering with India’s HCL Group to set up an outsourced assembly and testing unit (OSAT) for semiconductor chips, the two industry groups said in separate statements. While Foxconn Hon Hai Technology India Mega Development Private Limited, a subsidiary of Hon Hai Technologies, informed the Taiwanese stock exchanges of this development, the HCL Group said that the partnership was “an opportunity that provides strategic adjacency to the Group portfolio”.

“HCL Group plans to partner with Foxconn Group to establish OSAT operations in India. HCL Group has a strong engineering and manufacturing heritage and this is an opportunity that provides strategic adjacency to the Group portfolio,” a spokesperson for the company said in a statement.

Foxconn will hold close to 40% stake in the partnership and invest close to $37.2 million and HCL will hold the rest of the stake.

An OSAT unit provides third-party chip packaging and testing services to semiconductor fabrication units.

ET had in November 2023 reported that the HCL Group was close to setting up a “small-to-medium sized” chip assembly unit. Sources had then told ET that the Karnataka state government had offered HCL group land near the international airport in Bengaluru as well as in Mysuru.