Apple Supplier Pegatron To Join Foxconn To Make iPhones In India

iPhone-maker Apple’s Taiwanese contract manufacturer Pegatron is likely to join another Apple supplier Foxconn to begin manufacturing the latest iPhone 14 models in India.

According to a Bloomberg report, while the plan to shift manufacturing to India from China is not public, the Taiwanese manufacturer, Pegatron, has a factory in Tamil Nadu in India. It had begun manufacturing iPhone 12 handsets earlier this year and is generally responsible for assembling Apple’s entry-level models.

The move also comes shortly after Indian stores reported a shortage of iPhone 14 Pro and Pro Max and the company assured that India’s manufacturing would partake in addressing the shortage.

The Cupertino, US-based tech giant is looking to move 5% of the global manufacturing demand to India by the end of 2022, making INR 47,000 Cr worth of indigenous iPhones in FY23. 

It already manufactures the latest iPhone 14 variants in India via the Foxconn factory and reaps the benefits of India’s production-linked incentive (PLI) scheme. The PLI scheme intends to make India a hub for large-scale electronics companies, boosting domestic manufacturing in the country.

Currently, the US-based company’s iPhones are produced in India by its contract manufacturers – Foxconn, Wistron and Pegatron. 

Thus, brokerage firm JP Morgan is bullish on India’s manufacturing capabilities for Apple, outlining that one of four iPhones will be made in India by 2025.

India To Be One Of Apple’s Major Manufacturing Hubs?

According to reports, Apple is looking to manufacture nearly 25% of all its products – Macbooks, iPad, AirPods, Apple Watches and more – outside China by 2025.

The trade war between US and China, China’s Covid-Zero policy and Delhi-NCR’s rise in manufacturing prowess are making India an eye candy for large-scale manufacturers. 

Thus, in line with the plans and India providing an industry-friendly regulation, a Nikkei report previously suggested that Apple had asked its suppliers to move some production of AirPods and Beats to India. 

In response, Foxconn and Luxshare Precision Industry have begun looking to manufacture Apple’s acoustic devices in the country.

Despite this shift to India, analysts have considered the 2x growth a long shot. Market experts have suggested that one of the trends still counterproductive for Indian manufacturers is that iPhone components are still being built in China, shipped to India and assembled here, posing a pricing problem.

Thus, research firms estimate that it will still take nearly a decade for Apple to move just 10% of its production capacity out of China.