Cyclone Michaung-Triggered Heavy Rains Force Foxconn, Pegatron To Stall iPhone Production In Chennai

Taiwan’s Foxconn and Pegatron have stalled production of Apple iPhones at their facilities near Chennai due to heavy showers triggered by cyclone Michaung, Reuters reported, citing sources close to the matter.

The torrential downpour impacted the city’s major electronics and manufacturing hub, cars lay submerged and prompted the closure of the airport.

Foxconn has expanded its presence in India, investing in manufacturing facilities in the south, aligning with Apple’s strategy to diversify production beyond China.

In the quarter ending September, Apple achieved its highest-ever quarterly shipments from India, exceeding 2.5 Mn units, according to data from market analytics firm Counterpoint Research.

With around 35,000 employees at its Tamil Nadu iPhone factory, Foxconn is considering resuming production on Tuesday (December 5).

Pegatron is experiencing its second factory closure in recent months, with a previous interruption in iPhone assembly due to a fire in September. 

Following the fire incident, Pegatron temporarily suspended iPhone assembly operations. 

Contract manufacturer Pegatron is currently in talks to establish a second manufacturing facility in India for assembling the ‘latest iPhones.’ 

This aligns with the ongoing trend among Apple’s contract manufacturers, including Wistron and Foxconn, who are investing significantly in India to expand their production capabilities. 

Pegatron currently accounts for about 10% of Apple’s annual iPhone production in India, according to Counterpoint.

Cyclone Michaung is set to make its landfall on the southern coast of Andhra Pradesh on Tuesday morning (December 5), as per the country’s weather office. The cyclone is anticipated to bring sustained winds ranging from 90-100 kph (56-62 mph), with gusts reaching up to 110 kph.

Recently, Foxconn’s Indian arm, Foxconn Hon Hai Technology India Mega Development, allocated an additional $1.6 Bn (INR 12,820 Cr) for its construction projects. 

The move largely aligns with the company’s plans to diversify its production outside of China amid ongoing tensions between Beijing and Washington. 

The back-to-back developments come as Foxconn has sped up plans to build a $700 Mn facility on the outskirts of Bengaluru, spanning 300 acres, set to become the latest iPhone manufacturing hub in India. 

Foxconn has set an ambitious target to double its India employment, investment and business size in one year.

The company also allocated an additional $600 Mn for two facilities in Karnataka. Foxconn’s focus on India is evident from its Indian arm achieving a $10 Bn annual turnover by Q2 2023, showcasing significant growth in revenue, employees, and investments. 

India is positioned as Foxconn’s potential third global hub for electric vehicle contract manufacturing, targeting 500K-700K EVs by 2025. Additionally, Foxconn aims to expand its Apple product lineup and increase production in India.