Global Electronics Supply Chains Shift as India and Costa Rica Secure Over $2 Billion in Tech FDI

The global electronics and semiconductor manufacturing landscapes are undergoing a significant realignment as multinational corporations and sovereign governments seek to build more resilient supply chains. In two major developments, India and Costa Rica have secured substantial foreign direct investment (FDI) commitments aimed at diversifying production capacity away from traditional manufacturing hubs.

According to Bloomberg, Foxconn (Hon Hai Precision Industry) has approved a $1 billion investment to construct a new electronics assembly facility in Karnataka, India. Reports from Reuters and The Economic Times indicate that this initiative is part of the company’s broader strategy to diversify its global manufacturing footprint and expand its capacity outside of China. The investment is designed to leverage India’s production-linked incentive (PLI) schemes, which aim to establish the country as a major hub for electronics manufacturing and export. By utilizing these state-backed incentives, Foxconn is positioning itself to capture growing regional demand while mitigating risks associated with over-concentration in single geographic markets.

Simultaneously, Costa Rica is emerging as a key node in the Western hemisphere’s high-tech supply chain. The Wall Street Journal reports that Costa Rica’s Ministry of Foreign Trade has announced a combined $1.2 billion in FDI commitments from several US-based technology and electronics firms. These investments will be used to establish advanced semiconductor packaging and testing facilities within the country. According to Reuters, this development is supported in part by the US CHIPS Act’s International Technology Security and Innovation (ITSI) Fund. The fund specifically seeks to build more resilient and geographically diverse supply chains within the Western hemisphere, aligning Costa Rica’s industrial capabilities with US strategic economic security goals.

The trade implications of these developments are profound for global logistics and component sourcing. For years, the electronics sector relied heavily on highly centralized supply chains. However, the introduction of programs like India’s PLI scheme and the US ITSI Fund has altered the cost-benefit analysis for multinational firms. By subsidizing capital expenditures, these programs help offset the initial costs of establishing operations in emerging markets. Consequently, businesses are able to build redundant capacity, reducing the likelihood of severe disruptions to the global supply of consumer electronics and microchips. This trend is expected to foster new trade corridors, linking South Asia and Central America more directly to major consumer markets in North America and Europe.