Apple In Talks To Source Made-In-India Chips By Tata, Micron For Its iPhones

SUMMARY

Apple is reportedly in talks with Micron, the Tata Group, and other chip manufacturers setting up plants in India to source supplies worth $12 Bn for the India-produced iPhones

US-based chip manufacturer Micron received approval from the cabinet ministry in June 2023 to set up a semiconductor unit in Gujarat, Tata Electronics received the approval this year.

Apple is also gradually increasing the production of iPhones in India. India contributed about 14% to Apple’s overall production in FY24

In a big boost to India’s fast-growing semiconductor industry, tech giant Apple is reportedly mulling using made-in-India chips for the iPhones produced in the country.

Apple is in talks with Micron, the Tata Group, and other chip manufacturers setting up plants in India to source supplies worth $12 Bn for the India-produced iPhones, Financial Express reported citing sources.

If Micron and Tata Group’s units manufacture the grades needed by Apple, the bulk of the chip needed for iPhones would be sourced from these firms, creating a huge business opportunity, a source was quoted as saying by the publication.

The source also noted that no single company would be able to rival Apple’s spend on microchips made in India despite demand from buyers for these chips from the defence, aviation and auto sectors.

Following the launch of the production-linked incentive scheme to boost semiconductor production in the country, US-based chip manufacturer Micron received approval from the cabinet ministry in June 2023 to set up a semiconductor unit in Gujarat. This year, Tata Electronics also received the Centre’s approval to set up a semiconductor fab in Dholera, Gujarat in partnership with Powerchip Semiconductor Manufacturing Corp (PSMC), Taiwan.

Tata is also setting up a second semiconductor unit in Morigaon, Assam.

Meanwhile, Apple is one of the top buyers of semiconductor chips in the world. Leading chip manufacturer Taiwanese Semiconductor Manufacturing Company’s (TSMC) got 26% of its total revenue from Apple alone in 2021. As per reports, Apple was also responsible for 23% of TSMC’s revenue in 2022.

Meanwhile, Apple is gradually increasing the production of iPhones in India. As per the Economic Survey 2023-24, India contributed about 14% to Apple’s overall production in FY24. Contract manufacturers Foxconn, Wistron (now owned by Tata Group) and Pegatron cumulatively produced iPhones worth INR 1.2 Lakh Cr in the country in FY24. Of this, INR 85,000 Cr worth of devices were exported.

Apple will also manufacture the latest iPhone 16 series in India and the made-in-India phones would be available across the world within the first few days of the launch of the smartphones.

Earlier this year, Apple was also said to be in discussions with Murugappa Group and Tata Group’s Titan to assemble and possibly manufacture sub-components for iPhone camera modules.

As per Inc42’s analysis, India’s semiconductor market is expected to clock a 24% CAGR and reach a size of $150 Bn by 2030 from $33 Bn in 2023.