Barely days after reports surfaced of Apple's assembly partner Foxconn planning a major investment in India to set up manufacturing units, another of the iPhone maker's partners is now ready to follow suit. Taiwanese electronics major Pegatron is preparing to set up its first plant in India.
Though little is known about the investment size or the manufacturing capacity, reports said the facility to manufacture iPhones would be built in southern India. A report in The Economic Times said Pegatron had already registered a subsidiary in Chennai and officials were holding discussions with multiple state governments for land allocation.
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Fellow Taiwanese electronics manufacturers Foxconn Technology and Wistron have been manufacturing iPhones out of India with the former recently announcing plans of a $1 billion dollar investment to expand its existing facility in southern India.
The federal India government had announced a $6.6 billion plan in June amidst the Covid-19 lockdown to lure foreign investments in India's manufacturing sector. It had offered several incentives such as plug-and-play manufacturing clusters in order to lure these contract assemblers into India.
Though there is speculation that these measures are part of Apple's move to shift out a substantial chunk of its iPhone production base out of China, there has been no official word from the Cupertino-based tech giant on whether increased US-China tensions is driving them towards reducing their dependence on China. CEO Tim Cook had said so when Apple was forced to shut down operations following the Wuhan pandemic.
#Pegatron is #Taiwan's latest #iPhone maker to move into #India. https://t.co/kGS1t5Z4H8 pic.twitter.com/H6Ua8IEKzkJuly 17, 2020
Foxconn, which operates a manufacturing unit at Sriperumbudur, about 50 kms west of Chennai, is reportedly investing a billion dollars to expand the capacity of this unit and would be completed within a three-year time frame. The upgraded plant could provide employment to an additional 6000 workers, reports had said.
For assemblers like Foxconn and Pegatron, tapping the exports market would be a big opportunity, given the growing tensions between Washington and Beijing. Pegatron CEO Liao Syh-jang had told investors during an earnings call in March that the company was looking to expand overseas production facilities depending on client requirements and incentives offered by host countries.
Though Apple's India turnover last year stood around $1.5 billion of which around $1 billion came from iPhone sales, this accounts only for a small percentage of locally manufactured devices. Foxconn and Wistron have been assembling iPhone 7 and the iPhone XR from their India facilities.
