By TEEMA Photo courtesy of Royal Thai Government
From an industry perspective, the Indian market has huge potential because of the huge population of the country. However, Indonesia not only enjoys its market dominating position but also contains abundant nickel resources, which has always been the key raw material required in the manufacturing of lithium batteries for EVs. In addition, Thailand is known as the "Detroit of the East." The world's top automobile companies, which includes Toyota, Mitsubishi, General Motors, Ford and Mercedes-Benz, all have their factories set up in the emerging country, providing a comprehensive supply chain for the car industry.
In the "3+3" deployment blueprint planned by the management of Hon Hai, its primary focus will first be put on the EV industry. Foxtron Vehicle Technologies Co., Ltd., a joint venture between Hon Hai and Yulon Motor Co., Ltd. in the Hon Hai Technology Group has launched the MODEL T for electric buses, MODEL C for passenger cars, and MODEL E for luxury flagship sedans, while developing the core technologies of artificial intelligence (AI), semiconductors, and 5G communication in relation. In particular, the annual procurement budget for semiconductors of Foxtron Vehicle Technologies Co., Ltd. has exceeded US$60 billion, accounting for more than 10% of the average global market size in the recent years. Foxtron Vehicle Technologies Co., Ltd. has strategically planned to start the construction and establishment of semiconductor wafer fabs in India in the near future.
Hon Hai accelerates tie-up with Make In India for semiconductor chip factory
The central government of India has taken a major step forward with its “Make in India” policy for pursuing further economic development, and Indian Prime Minister Narendra Modi has been keen to attract large manufacturers all around the world to invest in the country, with the aim of establishing a home-grown Indian semiconductor manufacturing ecosystem that can be on a par with China's manufacturing capabilities.
With its precise vision of insight, Hon Hai saw the necessity of expanding the cooperation in building up a comprehensive supply chain of semiconductors in India. It was reported that Young Liu met with Prime Minister Modi to discuss the details in their Make In India plans, and that Hon Hai is going to invest US$118.7 million in a joint venture between its subsidiary Big Innovation Holdings Ltd. and Vedanta Limited, which is an Indian multinational mining company, and that the two companies had signed an MOU in early 2022 with the goal of manufacturing semiconductors in India.
More than half a year had passed since the start of the joint venture, and during Young Liu's meeting with Prime Minister Modi, the Indian Telecom and IT Minister Ashwini Vaishnaw also met with the delegation of Hon Hai. In terms of whether the meeting revealed any detail about the semiconductor fabs in the plan, Prime Minister Modi made it clear that he would welcome the expansion of the electronics and semiconductor manufacturing capacities of Hon Hai Technology Group in India.
The Government of India has pledged to deepen its drive for industries related to the manufacturing of EVs, in accordance with its plan for “producing EVs as scheduled and keeping the vow to meet its commitment to net zero emissions.” Hon Hai is also planning to set up a semiconductor fab in India within two years to form an important part of its policy corresponding to the New Southbound Policy with the assembly of EVs and manufacture of semiconductors.
Hon Hai in partnership with Indonesia to target battery supply chain
In addition to maintaining close cooperation with the Indian government, Hon Hai has also signed MOUs with the Indonesian Ministry of Investment, PT. Industri Baterai Indonesia (IBC), PT. Indika Energy, and Gogoro in order to set up factories to link the industry chains related to the manufacture of batteries and EVs, which will cover the fields of battery modules, battery cores, battery packs, four-wheeled EVs and two-wheeled EVs, in a bid to develop a sustainable new energy ecosystem in Indonesia.
Actually, one of the focuses in Hon Hai's EV development projects is actually the in-house making of battery modules, and Indonesia is well endowed with natural nickel resources, so it is reasonably crucial to build up a nickel reserve system for the industries related to EVs in the country. The multi-party MOUs signed by Hon Hai focuses on the development of lithium iron phosphate (LFP) and solid-state batteries, which specializes in the development of downstream industries related to nickel batteries. It can further help to build a battery platform of new energies for the mass production of battery cores and LFP batteries on site.
The first meeting between Young Liu and Indonesian President Joko Widodo in West Java Province was not only about the investment project and the exchange of ideas on batteries, green energy platforms and the e-mobility industry, but also a sign that the two sides could collaborate in the field of EV-related technologies and the anufacture of products, making Indonesia the place for the first overseas presence of Hon Hai's battery core factory.
Hon Hai's cooperation with all the Indonesian parties includes projects in the peripheral industries of EVs, for example, the industries of Energy Storage Systems (ESS), battery swapping stations and battery recycling. President Joko Widodo instructed the Ministry of Investment to fully support the needs of Hon Hai in the investment project of setting up factories, and the prospect of cooperation between the two sides is considered promising. Meanwhile, Hon Hai also expressed its willingness to assist the Indonesian government in nurturing talents in order to create a win-win situation.
Hon Hai visited Thailand to explore EV prospects, promising to boost local momentum
As the blueprint of Hon Hai Technology Group for EVs and semiconductors is gradually becoming clearer, Young Liu visited PM Prayuth Chan-ocha in Thailand again to learn more about the country's "30/30 policy" for adopting zero emission vehicles and the potential of EVs for environmental protection.
At the meeting, Young Liu said that Thailand was the first country in which Hon Hai Group was continuously operating a build operate and localize (BOL) business model, and the company would do its utmost to provide a successful result. In addition, while going forward in the future, the Hon Hai Group would continue to step up its technical assistance to facilitate the shift from conventional vehicles to EVs in the local automobile supply chain, and strengthen its partnership with Petroleum Authority of Thailand (PTT) to create an EV ecosystem, so that Thailand can become a regional production hub for EVs.It is clear that Hon Hai is determined to establish its presence in the country. PM Prayuth not only recognized that BOL was in line with Thailand's goals, but also pledged full support for the Group's EV and emiconductor investment plans, which will further stimulate the potential of the local industry.
Blueprints for Hon Hai and TEEMA are complete for a favorable deployment
Looking around the global EV and semiconductor supply chain, the Taiwan Electrical and Electronic Manufacturers' Association (TEEMA) has emphasized the new southbound policy more than once, even pointing to the prospects of India's development, and coupled with the location of the labor force and many new southbound incentives, it is the best time for Taiwanese businesses to invest in the region.
Young Liu has publicly stated that electric bus factories must co-exist with battery pack mass production centers in the future. At present, Hon Hai has been working on electric bus and EV production projects in Thailand, and is planning to operate a battery core plant in Indonesia.
The growing availability of auto components manufacturing chains in Southeast Asian countries is expected to contribute to the rise of EVs, echoing the views of TEEMA. TEEMA Chairman Richard Lee said earlier at the "Taiwan ICT Industry New Southbound Links and Cluster Promotion Conference" that the supply chain should be appropriately shifted and take root locally through localized production in order to respond to the development.
Taiwan, your most reliable partner!
The recent two multilateral free trade agreements in the Asia-Pacific region: Regional Comprehensive Economic Partnership (RCEP) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), have led to structural changes in the industrial base. Despite repeatedly struggling to survive, Taiwanese companies have finally seen the contribution of diplomatic relations towards deepening the US-Taiwan Initiative on 21st-Century Trade, the EUTaiwan Trade and Investment Dialogue, and the Indo-Pacific Economic Framework for Prosperity (IPEF) negotiations, thereby cementing the foundation for solid bilateral and multilateral economic and trade interactions.Taiwan's electrical and electronics industries are confident of creating a mutually beneficial and win-win situation by relying on its technological advantages and securing international support. TEEMA has thus been actively visiting the representative offices of various countries in Taiwan to keep abreast of the huge investment opportunities from these countries and to facilitate its member companies to reach out to the world and establish a constant presence in the global market.
