Apple set to open its 4th iPhone factory in India in a China+1 strategy

Apple is set to get its fourth manufacturing facility in India with the Tata Group reportedly planning a new factory that will manufacture iPhones, a move that aligns with Apple’s strategy of accelerating its supply chain in India.

The new factory, according to a Bloomberg report that cites unnamed sources, is expected to have 20 assembly lines and employ 50,000 staffers within two years of being operational.

The sources further said that the group plans to make the factory operational in the next 12 to 18 months.

“India is important to many big tech companies for several reasons – the human capital, relatively cheap labor pool, a maturing supply chain, and the country’s pragmatism,” said Prachir Singh, senior analyst at Counterpoint Research.

In October, the Tata Group acquired an iPhone assembly plant, located in Karnataka, from Taiwanese manufacturing firm Wistron for $125 million. The acquisition is still pending regulatory approval.

Queries sent to the Tata Group and Apple went unanswered.

These developments come at a time when Apple is looking to scale down its operations in China, due to the ongoing trade war between Washington and Beijing, and scale up its operations in Asian economies, including India, Thailand, Vietnam, and Malaysia.  

“Apple has been looking for a second place to expand and diversify its manufacturing operations beyond China. The new plant at Hosur could be a clear indication that India is that second destination,” said Abhilash Kumar, industry analyst at TechInsights.

“The year 2023 saw a lot of activity in India that propelled the nation to be the 4th largest in terms of Apple’s supply chain network,” Kumar added.

Apple’s strategy to shift its manufacturing operations to India gained more mileage in January this year as New Delhi provided initial clearance to several Chinese suppliers, who assemble multiple Apple products and sell parts for these products to Apple.  

AirPods and iPhone assembler Luxshare Precision Industry and a unit of lens maker Sunny Optical Technology Group were among the 14 suppliers who received initial clearances, Bloomberg reported.

Other than the Tata Group, other contract manufacturers such as Foxconn and Pegatron, are also manufacturing Apple products in India.

Foxconn, the largest contract manufacturer globally, has a plant at Sriperumbudur in Tamil Nadu, which manufactures iPhones, metal casings, and other components.

The company, which is the only manufacturer of Apple’s latest iPhone 15 and 15 Plus models, has announced plans to open two other manufacturing facilities at Devanahalli, Karnataka and Kongara Kalan, Telangana.

Pegatron, which manufactures older models of iPhones at its Singaperumal Koil plant in Tamil Nadu, is also reportedly planning a second plant in Tamil Nadu.

The new plant from Tata Group, according to Kumar, could generate a lot of employment opportunities for Indians while putting the country at the forefront of Apple’s manufacturing plans.

Another proof of India’s growing importance to Apple, Kumar said, is the recent launch of two retail stores by the company in Mumbai and New Delhi.

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