Foxconn’s Telangana Plant Faces Rare Earths Shortage

SUMMARY

AirPods primarily requires neodymium and dysprosium, among others, where neodymium, used as a magnet, is mined in China

The Foxconn Interconnect Technology (FIT) factory is located at Kongara Kalan, which is closer to Hyderabad

Foxconn brought the supply issue to the notice of the Telangana government

Foxconn’s Telangana plant has been hit due to shortage of dysprosium, disrupting the production of Apple AirPods, ET reported, citing people familiar with the matter.

The shortage is a shadow effect of China’s ban on the export of seven critical rare earth elements — samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium. These metals are crucial for producing magnets which are being used in everything from smartphones and fighter jets to electric vehicles and wind turbines.

Of all the rare metals, AirPods primarily requires neodymium and dysprosium. Neodymium, which is used as a magnet, is mined in China and other countries as well.

The Foxconn Interconnect Technology (FIT) factory is located at Kongara Kalan, which is closer to Hyderabad. FIT is a core subsidiary of Hon Hai Technology Group (Foxconn).

Inc42 has reached out to Foxconn for comments on the development. The story will be updated based on the response.

Foxconn brought the supply issue to the notice of the Telangana government, one of the sources was quoted as saying in the report.

The development comes weeks after commerce and industry minister Piyush Goyal met some of India’s top automotive players and component manufacturers in Delhi, urging Indian companies to develop tech to curb reliance on China.

Further, the central government is also working on an INR 1,345 Cr scheme to incentivise local magnet production, as per reports.

Meanwhile, Apple supplier Jabil manufactures AirPods components in Pune and has recently revealed that it is expanding the production of AirPods enclosures by leveraging its Tiruchirappalli factory in Tamil Nadu.

On the other hand, Foxconn has been doubling down on its investments in the country’s production capacity, amid the uncertain tariff situation from the United States towards Apple.

Earlier this year, the Taiwanese electronics contract manufacturer invested $1.48 Bn in its Tamil Nadu-based unit, via its Singapore arm, Foxconn Singapore Pte Ltd.

Notably, Foxconn more than doubled its India revenue to over $20 Bn (around INR 1.7 Lakh Cr) in FY25, as per reports. This surge is largely attributed to a substantial increase in iPhone production.

Additionally, the company has been heavily investing and building partnerships to boost its position in the semiconductor industry as well.

On that note, the Union cabinet approved the joint venture (JV) between HCL and Foxconn to set up a semiconductor unit, where the two entities cumulatively invest INR 3,700 Cr, for the facility to be established near Jewar Airport in Uttar Pradesh’s Noida.